Stocks Drift Lower On Lower Volume As Wall Street Awaits The Moment I Could Care Less About

September 18, 2007

All eyes are focused on one thing right now and I don’t believe I have to tell you what that is as I am sure we have all had this news event crammed down our throats 24/7 the past few market sessions. However, it is what it is and the Fed meeting tomorrow is “the one” (aren’t they all?) everyone has been waiting for. This decision is supposed to somehow be market moving and important. But the contrarian in me seems to think that no matter what they say, seriously, the market will not give a crap.

Anyways, the fact that so many people are focused on this event draws me to another question. Why does everyone care so much? Seriously, this doesn’t effect our trading one bit. Somewhere along the way, I have a feeling, some people have been taught to watch the Fed way too closely. Yes, it is important what they say. However, unless you are one of those daytraders who “flip” stocks, I am not sure why we should care what he says. Whatever Ben say simply can not have any meaningful impact on our trading. Let’s say the market sellsoff. Does that mean that I am going to need to sell all my longs. What if the market rallies? Does that mean that I need to jump in and buy something?

The fact that so many are worried about this decision is bullish, in my opinion, no matter how it works out. So many traders expect a selloff–if you don’t believe me, check today’s put/call ratio close at 1.08 for proof–that I doubt we will get what everyone is looking for. However, this rally has come on nothing but low volume, so it is impossible to completely ignore that argument. All great traders know that the best rallies have a lot of volume to them. This rally is completely absent of accumulation, despite some stocks showing great accumulation.

And that is just it. If you have been focused solely on a macro level in the stock market or you have not been objective and have instead focused only on the major market indexes, you have missed a lot of great longs. These longs are not breaking out on low volume. They are all breaking out on strong volume. If you notice the amount of longs that I have recently gone long the past few weeks, then you know that the market has been much stronger than what the average index is telling you.

I have no idea what the Fed will do or how the market will react, but at least we no longer will have to deal with Ben and this crap for a little while. If there is a selloff, we can sell most of our new longs and still walk away with strong gains. However, almost NONE of these charts are showing any signs of real selling and all of my new longs STILL have great looking charts. Granted, they have not acted perfectly and the stocks with the best patterns are not doing as well as they should. But that is what we are given and that is what we must take. If this rally had a lot of volume behind it, I guarantee our near perfect looking longs would be making us a lot more money than the small meager gains we have seen so far.

So, with that, there is absolutely NOTHING else I can give you of importance today that I have not touched upon at least once or twice the past week. We are all on the Fed hold until the FOMC announces their decision on interest rates. Until then, the true market addicts will just have to waste their time talking about an event that SERIOUSLY NO ONE WILL CARE ABOUT IN ONE MONTH. BIDU, GRMN, AAPL, NILE, DRYS, GOOG, RIMM, and the other leaders would agree with me, if stocks could talk.

Stocks Drift Lower On Lower Volume As Wall Street Awaits The Moment I Could Care Less About

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