One of Zweig's comments was to always watch what the Fed is doing. He noted when the Fed cuts stocks advance. And that is exactly what I was expecting today.
That is, until I read the Fed statement (see below). This was a very bearish statement from the Fed -- there is not one thing good about what they said. The economy is slowing, the credit markets are in turmoil, and they have no idea what is going to happen. There is not one positive statement in the Fed's statement.
So, the markets tanked hard after the Fed released their statement.
On all of the charts, notice the extremely heavy, post-announcement selling. Bottom line, the markets realized the Fed is cutting rates because things just aren't that good right now.
On the daily SPYs, notice the heavy volume, the strong downward bar and the fact that prices closed through the 50, 200 and 20 day SMA. There was a lot of technical damage today.
On the QQQQs, notethe strong downward bar, the heavy volume and the fact that prices moved through the 50 and 10 day SMA. While there was a lot of damage to this average as well, there is still technical support at the upward sloping trend line and the 20 and 200 day SMA.
Notice the heavy volume and the fact that prices bounced bounced off the 50 day SMA, through the 100 day SMA and into the 20 day SMA. Also notice the index bounced off of the upward sloping trend line that has been in place for 4 years. This index took a huge technical hit today.
On all of these charts, notice we've been advancing since late November. The Fed's statement may have ended that advance in one swoop.
