FOMC January 2013 Meeting Minutes Put A Damper On Stocks:
Some committee members think QE may need to end soon.
The Federal Open Market Committee’s January 29-30 2013 meeting minutes dragged down stocks today as investors took profits after the recent February 2013 rally became extended. A sharp change in trend occurred after the meeting minutes were announced at 2:00pm and then a sharp downtrend occurred about a half-hour later. The Fed is looking for a way out of quantitative easing but as the economic data continues to show weakness, there may not be a need to rush.
We’ve been neutral on the market for the last few weeks and swing trades are better than short term moves. We are now looking towards a defensive posture if current trends continue.
The TLT exchange traded fund has stayed above support levels, which could be bearish for stocks in the near-term. Key indicators like the mid-cap and small-cap stocks have fell through support levels today and may be suggestive of more weakness to come if follow-through occurs this week.
We are looking carefully at Europe and Asia for signs the market rally may be reaching a near-term peak while we are still bullish long-term. This could be a buying opportunity but Asian markets are fading the current rally right now. The S&P 500 fell to 1,511.95 losing -18.99 or -1.24% with increased volatility.