SHORT TERM: Finally the FED will let the secret out tomorrow
Stock indices opened on a positive note, but sellers moved in pushing the indices to the lows of the day by 11:30AM. The technical positive divergences kicked in, (nice to see a responsive market again), and the market rallied to its best levels of the day going into the close. At the bell the indices were up between 0.5% and 0.75%. The lower EW pivot in the NAZ was tested today 2094, but not the SPX as it held 1240. The operative EW pivots: NAZ 2094..2109..2153..2177 and SPX 1226..1240..1254..1268. The cyclical SPX/DOW are outperforming the growth NAZ/NDX during the past few days. This kind of positive divergence could eventually trigger a strong rally, if it holds and persists long enough. Short term momentum is rising, possibly a higher follow through tomorrow morning. Another index displaying some promise is the TRANsports. It looks like we could have an impulse wave up from the recent lows and currently correcting. Posting a chart of the TRAN in the photo section.
Nearly everyone expects another 0.25% short term rate hike tomorrow. After 16 hikes in a row, they’re all accustomed to the FED’s new millenium strategy of being a visiable and predictable. Some hawks are even forecasting a 0.50% hike. With the economy obviously slowing down over the first two months of this quarter. I’d rather see the FED acting visiable and responsible, and leave rates right where they are until the next meeting.
INTERMEDIATE TERM: downtrend, but bottoming
LONG TERM: bullish