An Update from an Older Ben Bernanke

Some good jazz from Helicopter Ben…That’s what he’s up to.

The general consensus seems to be that if stocks, bonds, and commodities rise, while the Dollar falls, after the FOMC today then that will mean the market interpreted the actions and rhetoric as dovish.

Should stocks, bonds, and commodities (especially precious metals and miners) fall, while the Dollar rallies, then it will likely mean a hawkish interpretation.

But these scenarios may be too straightforward at this point, as another scenario could easily play out.

That one would be if Yellen espouses a hawkish stance, but commodities rally anyway. In other words, the market may, finally, call her bluff that any type of tightening is unacceptable and will eventually squeeze her to not only undo a taper, but to commence another round of QE. (This is a variation of what Joe Fahmy wrote about here, which I am agreeing with but saying the Fed may hint at more hawkish action first, while not actually pursuing it).

Perhaps the straightforward scenario will play out with doves versus hawks. But with the Dollar and rates on the rise again in recent weeks, while silver hugs multi-year support, something tells me the next few FOMC meetings and announcements will become increasingly nuanced and violent.

Also note copper (JJC ETN proxy) trying to put in a higher low in recent weeks. Another hawk vs. dove commodity to watch today.

Courtesy of The PPT algorithm, here are the most current top five readings from my “12631 RELATIVE STRENGTH” custom-made screen, identifying which stocks are exuding some of the best performances to the market at-large at any given moment.

I look for stocks whose Daily PPT Hybrid Score surges, while the Weekly Hybrid has been negative over the past week. This can often yield stocks which are emerging from consolidations.

Members can click here to view and save the screen.

Sorted for at least 500,000 shares of daily average volume to ensure liquidity.

Please click on image to enlarge.

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I may day-trade part or all of it, but I am long Tekmira inside 12631 with a stop below $20 today.

The Ebola play has seen strong buy volume in recent weeks, and consolidated its August spike higher quite well. The play is to look for a secondary breakout now.

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My PANW long is back to the century mark this morning, as it continues to show signs of being as strong as any stock in the tape as far as institutional support and overall technicals. If we see a melt-up after the FOMC today I am likely add to this one and make it my biggest position.

As far as my shorts are concerned, they are all over the place–The Russia short shook me out yesterday but is back on track now. I scaled profits with a cover in SBUX yesterday, and did the same with AMZN previously. However, I may add back to both shorts if they remain sluggish like they are today.

Bonds are staging another fairly weak bounce, and I still have my TBT as a short bet on.

All in all, I expect the usual drifting action as we get closer to the FOMC today before the fireworks are likely to begin.

The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out) which I published for members and 12631 subscribers this past Sunday.

 Some sectors which could easily benefit from the higher rates, at least temporarily, are regional banks and insurers.

Two actionable long ideas from those sectors, if this thesis continues to play out, are HBAN MET, both seen below on their daily timeframes with constructive technical setups (price basing tightly within the context of uptrends).

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