The Fed almost said what everyone thought it would say on Wednesday, and, apparently, it was good enough to spur some initial buying.
It’s always amazing to see confirmation of the same thing we all know, and no one really thinks bullish for the market, to create some buying. Importantly, the Fed has confirmed that it will narrow the balance sheet, raise rates, and end asset purchases.
Perhaps, the headlines didn’t include a word that algorithms saw as bearish or included a phrase that was interpreted as bullish, but people didn’t react that quickly for what was the equivalent of affirmation. Revenue headlines? Yes, but Fed headlines are driven by programmatic buying. Unfortunately, I still follow the concept that the first move often fades the next day. That means I’m not excited to see us pop headlines right away because I think now we’ll start at $ 350 to $ 351 at PowerShares QQQ Trust (QQQ) by the end of the week. I hope I’m wrong.
Intel (INTC) has a chance to adopt a step higher even in its earnings report. Although it was not the market mover when it was a member of the Four Horsemen, the semiconductor industry has been under supply shock pressure for some time. If INTC is pouring any optimism into the industry as a whole, it should be enough to move the semiconductor index. Of course, Intel has its own against Advanced Micro Devices (AMD) and Nvidia (NVDA).
My preference is to see the QQQ test $ 350 to $ 351 post-Fed, handle, and set us up for some optimism from Intel and maybe even some positives from Xilinx (XLNX) and ServiceNow (NOW).
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