Wednesday Wrap: Hello, You Must Be Yellen.

In the wake of the today’s telegraphed FOMC announcement and Janet Yellen’s coming out party, stock markets first sold off slightly in muted and mixed fashion. But as the afternoon wore on and Yellen fielded questions, she dropped this bomb that appeared to re-introduce fast-acting traders to the concept of volatility:

$SPY goes to LOD after Yellen clarifies for reporter and says QE ends THIS fall.

— John Melloy (@stocktwitsjohn) Mar. 19 at 01:10 PM


This market was not ready for that comment from Janet. You can see it in vol and sentiment. $spy

— Aaron (@a_jackson) Mar. 19 at 01:19 PM

 

The S&P 500, Dow, and NASDAQ quickly traded to and through daily lows with the resultant spike in volatility as measured by $VIX and $VXX. The afternoon selloff may also be signaling some trouble on a bigger time frame as chartist Peter Brandt points out:

S&Ps are topping??? Hourly chart displays possible H&S top with high right shoulder. Stay tuned. http://stks.co/b0LfV

— Peter Brandt (@PeterLBrandt) Mar. 19 at 01:18 PM


$SPY FED juice ending, margin debt @ 5 year highs, trading volume falling & most bears dead. What's going to propel this market higher?

— Tom (@trycure2) Mar. 19 at 01:39 PM

 

Meanwhile, some traders are saying: “not so fast!” on this selloff:

As a 32 year veteran Fed Whisperer, throttle is still stuck open until GDP growth starts to speed up. Yellen Bull Market. $SPY $QQQ $RUT $$

— Super Q Guru (@SQGuru) Mar. 19 at 01:34 PM

 

Ms. Yellen also had some thoughts about how the Fed would act relative to changes in inflation:

Fed's Yellen says if Fed had concerns inflation would undershoot, then she's is confident Fed would act to prevent that $MACRO $FED

— FinancialJuice (@FinancialJuice) Mar. 19 at 12:52 PM

 

And lest you thought the bankers wouldn’t make out…

Bank stocks love the new "qualitative" guidance, it's being interpreted as a steeper yield curve for a longer period of time. $bac $jpm $c

— Joshua Brown (@reformedbroker) Mar. 19 at 12:51 PM

 

One day does not a trend reversal make. Tomorrow’s market action may hold the key to market direction for the rest of the season. Manage your risk and trade your plan.

Trade ‘em well!

~ Sean McLaughlin (@chicagosean)


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