Aftermath Of Fed Move But First A Word From Your Local Ponzi Schemer

Before getting into the meat of our look at today’s fundamentals, we have to observe one more time that karma is a force that often works strange wonders in the universe.

Martin Shkreli, the CEO of Turing, (yes, the guy who jacked up a commonplace pill costing a few bucks per dose to $750), was charged with securities fraud by the U.S. Attorney’s Eastern District office in Brooklyn today. (The drug in question, Daraprim, greatly benefits AIDS patients, pregnant women and cancer patients.)

With that out of the way, we are watching markets refocus and perhaps redress items that were submerged as we waited for the Fed to make its move. Although we have been watching crude plummet for some time, today it steps to the fore as the major sector propelling markets.

The main counterbalance against crude is the U.S. dollar, which found new strength in its battle with the euro.

West Texas Intermediate is down 1.80% at 3:00 PM New York time. Brent North Sea oil is struggling to stay even for the day.

Energy prices have been hampering the Dow and to a lesser extent the S&P 500. As a passing note, natural gas keeps extending its unsettling decline, one that began last December and has seen a drop in price of about 50%.

The U.S. dollar at 3 o’clock is up by about 1.00% and that robustness is helping to throw energy back every time it tries to rise.

The Federal Reserve’s simple hike and soft guidance yesterday confirmed what dollar bulls thought they believed in, and that pushed the greenback higher. The surging dollar demolished the entire precious metals complex.

Dollar strength alone pushed prices down by almost 1%. Regular trading hit the metals while they were down. Gold, silver, platinum and palladium were down 2.00%, 3.35%, 3.45% and 2.45% respectively. Ouch.

Equities in Asia and Europe may gain a bit of added luster because of the slippage in American energy companies’ share prices.

We are also watching continued year-end volatility take its toll not just on stock prices bur all markets as the final position squaring for 2015 draws to a conclusion. In the next few days (before Christmas), look for prepositioning as investors try to see over the horizon into 2016.

These strategies will rule, as will reassessment upon reassessment of the true meaning of the overall FOMC statement.

Our read? The Fed raised the rate this first time to appease hawks who wanted to do something and had no other place to apply pressure.

Wishing you as always, good trading,