wednesday update

SHORT TERM: FED leaves rates unchanged, market soars.
Stocks opened lower this morning responding to selling overnight, despite the positive news of Q4 GDP, which came in higher than expected. The market bottomed shortly after the open, as the NDX retested its recent lows. Then rallied into 11:00, and went into a holding pattern until the FED announcement was released at 2:15. By unanimous vote, for the first time, the FED decided to leave rates unchanged, as was widely expected. The wording of the statement, however, was far more positive than it has been in a long time. The market reacted immediately by rallying strongly. The SPX/DOW/NYA/R2K all made new bull market highs. For all but the SPX these were also new all time highs. Bonds rallied nearly 3/4 point, Crude rallied 95 cents (short squeeze?), Gold rallied $8.50, and the Euro was strong as well. With these new highs in the various indices, the probability of the SPX hitting 1462 in the very near future continues to increase. There are still more economic numbers due tomorrow and thursday, so the volatility should continue. At the close the SPX/DOW were 0.75% higher, the NDX/NAZ were 0.70% higher, and the TRANsports soared 2.75% despite the rally in Crude. Short term the cyclicals are beginning to get a little overbought, but not the techs. Usually there is some sort of retracement after a FED event. Many were expecting it in the last hour, possibly tomorrow. Best to your trading!
MEDIUM TERM: bullish
LONG TERM: bullish.      

About tony caldaro

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4 Responses to wednesday update

  1. Stephen says:

    yes, indeed. that also means Euro is going to break 1.2800 heading for 1.2400


  2. tony says:

    Hi Frank,
    Gold has made a nice run up without much of a pullback.
    Probably time for that pullback before it continues higher.


  3. Frank says:

    Also a gap fill for July 17 2006 gap down


  4. Frank says:

    Hi Tony,
    I just notice something interesting, if you overlay 15 minutes chart of GLD and DIA, it seems the go up and down quite alike.  Especilaly the 5 day or the 20 day.  Also GLD is hitting the 61.8% Fibo retracement from May hight of 72.15 to June low of 55.05, might get some resistance?


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