The Qs gave up some ground today on less than enthusiastic volume. This was pretty much as expected as we have pulled back to intermediate resistance at the 49th parallel.The VIX performed today exactly as VIX and More had predicted on Sept 12th, with a 8.5% range and a 6.5 % rise, finishing the day with a classic doji. The concept is the pre news, pre event, pre earnings and pre FOMC volatility spikes as uncertainty of the outcome nears.
Interestingly, although the VIX is expected to revert back to the 10/20 DMSAs in the next few days, it does not follow that the markets will rise.
The general tone of the market today was negative and more than a few commentators have noted that 25 to 50 basis points have already been priced into the markets in the past few days. Regardless of what the FOMC announces, this may be a case of buy the rumor, sell the news, so I have adopted a strong defensive position against my otherwise long portfolio. Extreme caution is advised for tomorrow as the action will be fast and furious.
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