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Banks Weigh on Stocks as Federal Reserve Meeting Hangs Over the Market

|Includes: AABA, AAPL, AMZN, ATHR, BIDU, Booking Holdings Inc. (BKNG), CLB, CMG, CREE, DECK, GMCR, GOOG, GS, ISRG, MA, NFLX, PCP, V

Monday’s have been very positive for the market over the last 6 months, but today it wasn’t meant to be.  After the market hit new highs last week it isn’t much of a surprise to see the market end lower today.  Volume wasn’t overwhelming to the downside a good sign to see institutions weren’t dumping stocks.  Bank stocks lead the market lower as fears regarding Goldman Sachs SEC case as well as the Federal Reserve Open Market Committee meeting hung over financials.  Not a terrible day by any stretch of the imagination as stocks pulled back in normal fashion.

 

As you might have guessed many pundits have deemed this market to be overheated and it wouldn’t be a surprise if we see further price declines this week.  However, positive earnings news from semiconductor stocks Monday after the close may spark some buying interest.  The long-term trend is still intact as well as our leaders are holding up.

There is an exception and that is Google and its deterioration to its 200dma.  At the moment it is sitting just below this key support level and appears to want to continue to move lower.  With our uptrend remaining intact it isn’t something we would want to short, but we are taking note as it was one of the stocks that found support and moved higher since the March 2009 low.  If we begin to see other leaders from the March 2009 low begin to act like Google we’ll certainly give us pause.  We aren’t there yet, but it is something we are looking at.

The talk of the pundits will likely surround the Federal Reserve and whether or not they will change their language regarding their stance on monetary policy.  We only care about the price and volume action, but certainly most will be caught up with what Big Ben and his crew will be doing as far as monetary policy is concerned.  At some point, the Federal Reserve will raise the target rate.  It is any one’s guess as to when that will be so until that day comes we’ll stay focused on what really matters:  price and volume action.

There aren’t too many quality growth stocks hanging around proper buy points.  Do not chase stocks as we can often see quick pullbacks shaking you out of a big winner.  It doesn’t mean you hang on for dear life either as a pullback can mean the end to a stocks run.  Make sure you are buying properly to avoid disaster.

Tomorrow kicks off the Federal Reserve meeting and it’ll be interesting to see how stocks react tomorrow and whether or not volume selling takes over.