Wang’s Happy Trading

Well, the market didn’t get what it wanted from the Fed, who lowered the federal funds rate by only one-quarter percentage. Immediately after the rate announcement, the market dropped sharply and continued the slide all the way to the close. The Dow ended down almost 300 points; SPX stumbled 38.31 points; and Nasdaq lost 66.6 points.

Here’s how the market looked at the close:

VIX jumped +13.74%! USO (oil) and UNG (natural gas) closed slightly up, adding +1.3% and 0.56%, respectively. Most sectors were in the red. HGX (housing) and XLF (financials) led the slide, losing 7.63% and 5.05%, respectively. Techs were mostly weak: INX2 (Internet) -1.62%, SOX (semiconductors) -2.08%, BTK (biotechs) -2.39%, and SWH (software) -1.63%. XME (metals and mining) was down 4.17%, while GDX (gold miners) lost 2.98%; even GLD (gold) closed in the red! FXI (Chinese ADRs) dropped 4.77%.

SPX

SPX stumbled 38.31 points to close at 1477.65. It closed below its 10-day MA, but, managed to stay above the 30-day MA. The MACD dropped.

Nasdaq

Nasdaq lost 66.60 points to close at 2652.35. It closed below both its 30-day MA and 10-day MA. The 30-day MA is still sliding. The MACD was also lower.

The market now could slide further to test the 20-day MA (the cyan line). On the other hand, this quick drop might give some of the high-flyers more breathing room. This weekend, I said, “We’ll continue to hold lots of cash and make quick trades as the opportunites present themselves, until the market demonstrates a confirmed reaction to the Fed’s next rate decisions.” It is good to be holding lots of cash right now. The drop was sharp today and it may take a few days for the market to sort things out. Things may also be more volatile in the next few days. We’ll be watching the 20-day MA closely to see it can hold.

This morning, STM announced plans to purchase GNSS in an all-cash deal. STM shares were down 1.93%, while GNSS shares soared more than +57%!! T raised its dividend and announced an expanded share buyback plan. Its shares traded as high as $40.69, but, closed at $39.46, up +4.12%. CSCO shares traded higher today, +1.3% , despite of the unfavorable afternoon reaction to the Fed, as AT&T (T) is deploying routing equipment supplied by CSCO. JNPR, CSCO’s competitor, was also strong, adding +3.85%. BIIB shares traded as high as $77.85 today, but, closed at $75.39, up +1.92%. It seems that the buyout speculations are alive again. After the market, BIIB shares jumped high again, up another +2.81%!

Good night and HappyTrading! ™