Reaction to Fed Minutes

Sometime between late Wednesday and mid-day Thursday, we should get a read on the market’s true reaction to the minutes from the last Fed gathering. At some point, the market will take a breather for a day or two in the form of a pullback. If the Fed minutes serve as the catalyst, the recently cleared downward-sloping blue trendline below may act as support.

It seems unlikely the markets will swoon for an extended period due to any tapering-related comments in the minutes. From Reuters:

Peter de Bruin, a senior economist at ABN Amro, said he expected the minutes to show a consensus forming at the Fed to start scaling back its $85 billion-a-month stimulus program in September, following a recent pick-up in U.S. data. “I think we have already seen the main fireworks from the Fed’s intentions to taper (scale back stimulus),” de Bruin said. “I would be surprised if we saw another strong rise in yields.”

……read more HERE

Champion (1938-39) gives the saying, “Sell in May and then go away,” as a proverb from the British Isles, commonly heard at the “Stock Exchange.” From what we can discern, it has become popularized in the financial press due to the efforts of Yale Hirsch over at Stock Traders Almanac. In fact, our own research tends to confirm its accuracy.
          Based on the Dow-Jones Industrial Average, the month of June has seen declines in 35 of the 52 years (67%) since 1961. Furthermore, August, June and September consecutively rank as the worst performing months of the DJI since 1950. We find it fascinating…..

…..read more HERE