FOMC

by Larry Levin

Today was FOMC day - the day the Federal Open Market Committee told us everything is fine...kind of. Since this is what the FOMC always says, it came as no surprise. There was a surprise, however, that came from the severely muted reaction to the FOMC decision and accompanying statement that partially follows.

The "normal" reaction to the FOMC statement is wild; the market trades in both directions by 15.00 to 20.00 handles before it comes close to settling down and chooses a direction. Moreover, this is normally an instant reaction.

Diverging from the norm, the high to low range for SIX MINUTES (a lifetime after the announcement) after the announcement was an amazingly low 2.50-points. It was breathtakingly quiet on the screen and in the pit. How long will the dearth of volatility last?

In today's announcement we read:

Information received since the Federal Open Market Committee met in November suggests that economic activity has continued to pick up and that the deterioration in the labor market is abating. Pfheew, sure glad that pesky recession thingy is over. "Hey Matilda, let's jump in the deep end: water's warm!"

Household spending remains constrained...

Household spending is constrained by a weak labor market...

There is "modest" income growth...

Household wealth is falling...

There is tight credit...

Businesses are still cutting back on fixed investment...

Businesses remain reluctant to add to payrolls...

Economic activity is likely to remain weak for a time...

And finally...In light of ongoing improvements in the functioning of financial markets...

Yes sir, right from the Fed's mouth - the US is fine - nothing to see here.


Previous Day's Trading Room Results:

Trade Date: 12/16/09

E-Mini S&P Trades*
(before fees and commissions):


1) No "Secrets" trades were filled today.

2) Algorithm positions (2)

3) "Reading the Tape" positions (9) ...combined Secret's, Algo, & "Reading the Tape" total...+2.25



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