John Hughes (212-692-6391) jhughes@epiphanyresearch.com
We know the FOMC meets tomorrow and that may be the reason the trading has quieted down over the last few days. Our biggest fear is the market may be quieting down here and this choppy trading is what we can expect through year end. Most hedge funds are underperforming the major indexes and are playing here because they have too. We are worried that this has already forced most participants to cover shorts and get long. If that’s the case, the fuel for a further rally may not be there. The market rarely satisfies the majority and with most looking for further upside, it may not be that easy to come by.
It's really all a question of when participants decide to cash in rather then playing one more hand. With three trading weeks left in the year, we are getting closer to that inflection point.
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