MLR - PMP 9/18/13

Published : September 18 2013 at 9:00 ET

Major averages were up on lower volume ahead of Wednesday's Federal Reserve policy meeting decision. The central bank is widely expected to scale back its $85-billion-a-month bond-buying program by anywhere from $5 billion to $15 billion. Data on the economy has been mixed, and the Fed does not want to upset a recovering economy that has been fragile and sluggish. Any tapering could therefore be done in a way to minimize any impact on the economy, thus a token type of tapering may be in the cards. Fed Chairman Ben Bernanke's term ends in January. Bernanke has said that stimulus may end entirely in 2014, depending on economic data. Should Janet Yellen succeed Bernanke, any tapering done by the Fed in 2014 is likely to be gentle.

Gold is flirting with the $1300 price level as it continues to decline after a two-month rally off of its late June lows. The yellow metal, along with silver, may be flashing some clues regarding the commencement of QE tapering, but a Fed announcement that surprises in one way or another could easily send the metals moving sharply in one direction or the other. For now, with the SPDR Gold Shares (GLD) having violated its 50-day moving average, there is no trade in gold, although the iShares Silver Trust (SLV) has managed to hold above its 50-day line.

3-D companies Exone (XONE) and Stratasys (SSYS) have been taking it on the chin lately, but Three D Systems (DDD) has managed to stay relatively constructive as it has held its recent breakout. Yesterday it flashed a pocket pivot following an analyst's buy recommendation. Despite the carnage in XONE and SSYS, its group rank is still #7.

Facebook (FB) has been a leader in this market and showed its resilience after selling off hard on Monday by turning back sharply to the upside with a continuation pocket pivot as it finished near the high of its intraday range. We have reported on FB previously, including its pocket pivot on August 23. (AMZN) also had a pocket pivot off of its 10-day moving average as it recovers from a pullback that took it right back to the top of its prior base breakout. AMZN has been something of an erratic stock for a big-cap NASDAQ name as it has made little net progress over recent months despite breaking out of a multi-month base in June of this year.

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