March FOMC Statement Markup Comparison

By Jeff Pietsch | March 16, 2010 | 2:31 PM |  0 CommentsTweet This

Blue-lined markup comparison of the March versus January FOMC statements below. Also see past Fed-Day reactions on this site, and prior statement markups here. It would appear that the focus here is on continued stabilization and a reiteration of its in-place stratagems and TARP unwinding schedule, including the requisite Hoenig dissent.

[Click Graphic Below to Enlarge]

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The Dismal VXX

By Bob Barnes | March 16, 2010 | 9:14 AM |  0 CommentsTweet This

As promised yesterday, here's the sad chronicle of VXX's steady decline and decay. Little more than a year in existence, this pitiful proxy for market volatility has fallen from 110 in April to 23+ yesterday, a staggering 79% drop. And it doesn't look like the fun's over yet.
The ATR8 has fallen from 6 in April to less than 1 today, a modest 83% drop. Reversing yesterdays' ATR/price ratio logic makes the situation appear a bit rosier but you can only put so much lipstick on a pig . . bottom line . . it's still a pig.
A little aside here... the 20 day beta of the VIX is -3.51, while the beta of he VXX is only -2.16, so a thinking man might expect the VIX to reflect a larger drawdown than the VXX. Not so.
I've tacked on the AROON indicator in the lower technical panel just for fun. This rather esoteric momentum signal needs to be "tuned" to reflect the beta of the study target and this is about the best we can do with VXX. Not a lot of BUY signals here and the door is wide open for further declines so thinking twice is the first caution here before getting bullish on the VXX.

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GBP/USD Races to Prior Day Resistance

By Greg Michalowski | March 16, 2010 | 8:40 AM |  0 CommentsTweet This

The GBPUSD has moved up sharply over the last few hours after falling earlier on concerns about the debt situation in the UK.  The price is up testing the lows prior to the fall yesterday That level comes in at the 1.5151 level. The price has stalled at the level it seems. Support comes in at the 1.5110 level which was the initial highs on the spike higher today. The 1.5085 is addtional support.  A move above the 1.5151 level would look toward the close from Friday at 1.5183.  Above that the 1.5206 high price for the week.

A sharp fall in the EURGBP has helped contribute to the GBPUSD strength this morning as well.

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Pullback to 5-Day MA

By Jeff Pietsch | March 15, 2010 | 3:43 PM |  0 CommentsTweet This

Today marks the beginning of either a mild retrace or a choppier consolidation range, in my opinion. Because this is only the first minor test, buyers have been quick to put in a floor and have subsequently bid price back up to the rising five-day moving average. While this reaction may bring us into the low-SPY $115s, the VWAP at that same level could provide strong resistance with down volume and the AD line as negative as they are. Note that tomorrow is an FOMC day.

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Chart of the Week: RUT vs. DJIA

By Bill Luby | March 15, 2010 | 2:10 PM |  0 CommentsTweet This

Among the many ways to evaluate the speculative activity in stocks is to evaluate the relative interest in small cap stocks versus blue chips. I like to do this by simply comparing the Russell 2000 index of small cap stocks (RUT) to the Dow Jones Industrial Average.

As the chart of the week below shows, for all of January and most of February, these two indices were tracking fairly closely. During the last two plus weeks, however, the Russell 2000 has begun to significantly outperform the other major market indices while the DJIA has been an underperformer in relative terms. As a result, RUT has begun to separate from the DJIA, indicating that investors are developing an appetite for riskier small cap stocks and are shying away from the safer blue-chip alternatives. A strong RUT relative to the DJIA typically means that the "risk trade" is in full gear and investors are comfortable placing more money in more speculative assets. As long as this trend continues, it is generally bullish for stocks as a whole.

For more on related subjects, readers are encouraged to check out:

• Capitalization and Bullishness
• A Baker's Dozen of Favorite Indicators
• RUT Hedge Fund Puke?

[source: StockCharts]

Disclosure(s): none

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