Stocks Mixed Ahead of FOMC Announcement

December 12, 2016 9:32AM CST

Stock Indices are mixed ahead of this Wednesday’s FOMC announcement.  The Dow is slightly positive heading into the close, while the mini S&P and Nasdaq are both negative on the day.  It is not necessarily all that surprising to witness some downside following a very strong week last week, a slightly overbought reading, and most expecting the Fed to raise on Wednesday.  While those are all acceptable reasons for longs to look to book some profits, today’s sell offs are far from impressive if I were already or short looking to short these markets.  Considering that China closed down 2.5%, which was their biggest hit in six months, it isn’t unreasonable to expect that we would see US indices down quite a bit more.  That said, it isn’t very common to see the USD Index down 0.6% while also seeing most of our stock indices higher as well.  With the news that is being released on Wednesday, it is not all that alarming to have the typical correlations get a bit out of whack.  Risk management is paramount in such situations, and I believe we’re seeing profit taking and hedges being initiated to decrease risk ahead of Yellen’s announcement. Emini Daily

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