Fed keeps interest rate steady, markets trading like a yo-yo

Fed keeps interest rate steady, markets trading like a yo-yo

Despite expectations to the contrary, Hilsenrath called the central bank’s non-move. Stocks sink like a rock, then rocket modestly up again as HFTs enjoy their fun unhindered.

Yo-yo collection.
Yo-yo market or Zombie Apocalypse? Take your pick. (PR image, Zombie yo-yo)

WASHINGTON, Sept. 17, 2015 – We promised we’d be back with a brief report this afternoon once the Fed released its interest rate verdict—officially at least—at 2 p.m. EDT. That they did, and after you parse all the mush and gobbledygook, the nation’s central bank has decided to leave interest rates unchanged. For now.

Read also: Hilsenrath on interest rates: ‘Looks like Fed won’t do it’

Which brings us back to where we’ve been throughout 2015, in a Never-Never Land where HFTs and other assorted rogues trade illegally, manipulating essentially news-less markets for fun and profit while continuing to ruin the portfolios of serious investors, or at least those who remain.

Markets ran up modestly prior to 2 p.m., indicating that the usual privileged insiders already had the Fed’s call in hand and were bidding prices up. But moments after the Fed’s announcement was officially made public, a cold blast of heavy selling hit the market. Once up around 50 points at 2 p.m., the Dow was down 50 points in rather short order.

By around 2:15, averages had steadied and then gone back up again. By 2:30, the Dow was back off around 10 points. Now, as we write this, one minute later, the Dow is back up 35. Who knows whether we’ll end the day in the green or in the red? Simple insanity, but that’s par for the course in 2015.

This is the kind of incredible nonsense the SEC has been ignoring now for years. It’s simply the HFTs having their fun, doing their usual front-running and spoofing, selling and shorting into the announcement around 2, then whipping positions back and forth after that to capture hundreds of mini-moves in share prices each time they ran markets up and down. They’ll likely do this for the remainder of the afternoon.

What they should be doing is perp walks, but under this administration, that’ll be the day. Why would they want to irritate those big Democrat donors who run the casino and stuff their wholly-owned congressmen for life (and administration faves as well) full of fresh, ill-gotten funds for Campaign 2016.

You have to trade around this kind of garbage until it settles down.

Meanwhile, Fed-wise, we’re back to “Hamlet” and “Waiting for Godot.” The Fed will raise interest rates. An eensy-weensy bit. Some day. Some how. December is now a good guess for the magic day. But no one really knows, and Yellen’s Fed isn’t telling. It’s all part of the Most Transparent Administration in History that we’ve been enduring for seven years. Genuine, serious investors can be forgiven if they’re starting to feel like Ulysses, who, at a similar point in his wanderings, was wondering if he’d ever see his home again.

No trading tips today, or until we see the HFTs and other crooks taking a few days off to spend all the money they made this afternoon.

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17