So the FOMC came out today and basically said the same thing they always do – no taper. Following the announcement GOLD, Bonds and Equities took a dip but nothing that should be any concern for long term participants. After a large run up like we have seen in the past couple weeks, rest is due, do I know exactly when this rest will come? Absolutely not. However, combining the size of the move, the break down in momentum names and the heavy distribution day in the small caps today (IWM), it could be the next couple of days.
The refiners were the standouts after the FOMC announcement. Following my Tweet at 3 PM (https://twitter.com/BenCBanks/status/395627189585997824), the refiners ripped higher a couple percent closing at the high of their day. Going forward, I would focus on this group of stocks ($TSO, $VLO and $ALJ), I will be looking to buy a gap down in these stocks tomorrow if we are so lucky to get that. I am currently long $ALJ in the competition account.
Not all stocks are created equal. The China momentum names continued their relative weakness today. This includes, $SINA, $QIHU, $SOHU, $DANG and $CSUN. $CSUN is a target short idea I am looking at (and have a position in, in my ‘competition account’. The thesis behind this trade is as follows – The momentum names (solars in particular) have continued to weaken, combine that with the relative weakness in China the $CSUN short versus the high of the day is a good risk:reward trade.
Finally, Gold stocks continue to set up for higher prices but need a few more days to build tight patterns worth focusing on. They remain on watch.
I speak about all this and more in the video below. As always, shoot me an email or Tweet me (@BenCBanks) if you have any questions or comments. Charts are below the video.