The markets continue to roar higher with the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) trading at $165.60, +1.10 (0.67%). This is the second solid up day in a row, both coming prior the FOMC Policy Statement tomorrow. While the markets are charging higher into this major event, financial stocks have stalled and are flat to negative. Goldman Sachs Group Inc (NYSE:GS) is trading at $163.65, -0.46 (-0.28%) while JPMorgan Chase & Co. (NYSE:JPM) is trading at $53.89, +0.04 (0.07%).
Does weakness in the financial stocks signal FOMC policy disappointment? Maybe a stalling to QE? This monster rally up into the meeting with the financial stocks lagging does suggest this thesis and puts intelligent traders on high alert.
The key here is to understand that the financial stocks are directly correlated to the quantitative easing (money printing) that the Federal Reserve has been doing. In other words, they would be the most directly influenced by any slight change in monetary policy. Therefore, their weak trading could be a signal.
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Chief Market Strategistwww.InTheMoneyStocks.com