This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Global Macro: Traders Remain Neutral Ahead of Fed Decision

Stocks in this article: VXXTLTGLD

NEW YORK ( TheStreet) -- Equity, bond and commodity ETFs pared gains or losses from the previous day as investors are electing to hold off on speculating the Fed's decision. The most volatile asset was by far the iPath S&P 500 VIX ST Futures ETN (VXX).

At the start of Tuesday's trade the volatility index looked as if it was going to breakout to new highs. By the afternoon, however, prices had collapsed back into the range. This lack of commitment to the fear indicator allowed equities to bounce higher, having broadly sold off since early December.

Similarly, the iShares 20+ Year Treasury Bond (TLT) pared losses from the day before as investors chose to have neutral exposure to long dated bonds ahead of Wednesday's meeting. The rally in bonds caused interest rates to fall leaving rates unchanged from Monday's open. Lastly, SPDR Gold Shares (GLD) steadied after a sharp fall on Monday alongside a stronger U.S. dollar.

The lack of discernible change in major assets from Monday's opening prices indicates that investors are not attempting to front run the Fed decision. September's policy meeting was successful in confusing the market and trapping speculators on the opposite side of price movement.


Leading up to the meeting, it looked certain that the Fed would choose to tighten stimulus measures, having spoken about tapering since early May. When the committee announced that stimulus would be left unchanged, bidding went wild in gold, bonds, and equities, moving significantly higher in a matter of seconds. The decision was highly profitable for some, but most speculators felt a lot of pain being squeezed out of short positions.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,399.67 +19.26 0.12%
S&P 500 1,904.01 +17.25 0.91%
NASDAQ 4,316.0740 +57.6360 1.35%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs