FOMC QE4 Foolishness Pushes Stocks to Cliff Edge

Analysis of the Russell 2000 (824.20): I consider Wednesday's QE4 reaction high at 837.29 as a failed test of my annual pivot at 836.15. The QE3 high was 868.50 set on Sept. 14. The daily chart is overbought and the weekly chart stays positive with a close today above the five-week MMA at 815.81. My monthly value level is 786.64.

Analysis of the PHLX Semiconductor Sector Index (SOXX) (383.67): I consider Wednesday's QE4 reaction high at 391.29 as a failed test of the 200-day SMA at 389.36. The QE3 high was 410.82 set on Sept. 14, which is well below the year to date high of 444.96 set on March 27. The daily chart is overbought and the weekly chart stays positive on a close today above the five-week MMA at 375.58. The 200-week SMA is a major support at 361.44.

At the time of publication the author held no positions in any of the stocks mentioned.

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This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined www.ValuEngine.com in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at [e-mail].

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