Getting Back In The Saddle

It has been a rough couple of days with my eyes healing, but today they are a little better and I am going to try to put in a full day. If anyone out there has had PRK surgery, I'd love to hear your story.

Today we have a FOMC meeting, so I would expect that action in the market to be a bit muted until after the announcement. There is some chatter that the Fed has been calling around and inquiring about reverse repos, which is Fed-speak for one of the initial steps it would take to remove some of this liquidity it has flooded the system with.

I think this talk is very premature. If the Fed is talking about this, it is just so that it can be crystal clear when the time comes, and have no surprises. I expect today's statement from the FOMC to be little changed from the previous one. I doubt there will be any hint at withdrawing liquidity at this time, as the economic recovery is just taking hold.

The stock market has continued to stair-step higher this month, confounding those who said we would surely get a September correction. I suspect quarter-end window dressing could also start playing a factor as we get closer to month end, making a large correction even less likely, at least for more than a day or two.

The dollar is up today, weighing on commodities; energy and materials stocks are down the most, while consumer staples and tech are up on the day; the 10-year yield is flat near 3.45%; and the VIX is also flat around 23.09.

Trading comment: I have not made too many adjustments to our portfolios this week. Today, RIMM is breaking out to a new high, but it reports earnings on Thursday so I might consider taking some partial profits ahead of earnings. Otherwise, most of our positions continue to act well. Participation remains broad, and group rotation continues to benefit the overall market despite the current overbought condition.

long RIMM