FOMC Update - The Clueless Edition

One thing becomes quite clear when you look at this chart: when price gets below 1050, somebody (or somebody's computer) starts buying, with the exception of early July (the computer may have been busy playing chess). For the IBD tyoe traders, we got the volume we were looking for today, and nearly had enough of a gain during the day for a follow through, but the release of the FOMC mnutes was good for about a 10 point drop. Only a late stick save prevented what could have been a really disastrous day and month.

This is becoming a tale of two markets. The Nasdaq, which depends heavily on technology, has been very weak of late, and an important part of that is the semiconductot index, which, to put it charitably, is coming unglued. This has broken any support from the last 6 months it might have had, and is depending now on Mr. Fibonacci for support. I'm not betting it will get it.

As if a mirror image, the all important gold and silver index is nearing the top of it's trading range and at some point will probably try a breakout. Even the FOMC fear of "disinflation" isn't putting a damper on this.

Once again, the percentage of stocks on the Nasdaq that are above the 50dma has entered "bear" territoty. below 30, with all moving averages moving down. It does seem to be losing it's down side momentum here, but is still significantly weak.

The smae index n the NYSE, which has entered the "no man's land" between 30 and 50. Traditionally this seems to be a transition zone, and it does not stay there long, so I am looking for it to move sharply in one direction or another in the near future.

From the FOMC minutes (I did not read them, but saw the highlights) it appears that the Fed is far less confident in the economy than they have been letting on. It is also becoming apparent, despite Bernanke's claims to the contrary, that they are clueless what to do about it.

I will have the new highs update shortly.