SHORT TERM: FED stays the course, DOW +44
Overnight the Asian markets were mixed. Europe opened higher and closed +0.80%. US index futures were higher overnight. At 8:30 Housing starts were reported lower: 575K v 611K, and Import prices were reported lower as well: -0.3% v +1.3%. The market opened at the uptrend high, SPX 1153, and then pulled back to 1150 by 10:00. After that the market rallied to new uptrend highs by 11:00 and hit SPX 1157 around 11:30. For the next couple of hours the markets drifted lower while awaiting the statement from the FOMC: http://www.federalreserve.gov/newsevents/press/monetary/20100316a.htm. The market action after the FOMC statement was somewhat subdued. After hitting SPX 1154 at 2:00, the market bounced on the statement to 1158, pulled back to 1154, and then started to rally again. Just before the close the SPX hit 1160, and then the market closed at 1159.
For the day the SPX/DOW were +0.60%, and the NDX/NAZ were +0.65%. Bonds gained 16 ticks, Crude rose $1.95, Gold rallied $22.00, and the USD was lower. Support for the SPX remains at 1146 and then 1136, with resistance at 1168 and then 1176. Short term momentum hit overbought this morning and remained there for the rest of the day. Tomorrow, the PPI will be reported at 8:30. At 2:00 FED chariman Bernanke gives Congressional testimony on banking supervision.
Today’s rally to new uptrend highs helped confirm the Minor wave 4 low yesterday at SPX 1141. It was a small pullback of only 12 points, but it was the largest pullback in three weeks. Next target is the OEW pivot at 1168. Rallies in Gold and the Swiss Franc today suggest the uptrend in the USD should be over. A declining USD should support the rest of this stock market uptrend. Best to your trading!
MEDIUM TERM: new uptrend high SPX 1160
LONG TERM: bull market