SHORT TERM: volatile FOMC day, DOW -114
Overnight the Asian markets gained 0.1%. Europe opened lower and lost 0.1%. US index futures were higher overnight, but the market opened unchanged at SPX 1872. After a dip to SPX 1870 in the opening minutes, the market entered a 1871-1874 trading range until 2pm. The FED then released the following two statements: http://www.federalreserve.gov/newsevents/press/monetary/20140319a.htm, and http://www.federalreserve.gov/newsevents/press/monetary/20140319b.htm. The market immediately dropped to SPX 1863, bounced back to 1871 by 2:30. Then when FED chair Yellen started the press conference the market dropped to SPX 1850 just past 3pm. After that it rallied to SPX 1864, then dipped to close at 1861.
For the day the SPX/DOW were -0.65%, and the NDX/NAZ were -0.60%. Bonds lost 33 ticks, Crude added 20 cents, Gold dropped $2, and the USD rallied. Medium term support drops back to the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: weekly Jobless claims at 8:30; then Existing homes sales, the Philly FED and Leading indicators at 10am.
The market opened flat today, bounced back to yesterday’s SPX 1874 high, then waited for the FOMC statement. At SPX 1874 we could squiggle out five waves up from 1840, (which some may count as three), and there is a potential negative head and shoulders (1868-1884-1874) in place. So there is something to satisfy the short term bears and bulls. The pullback today to SPX 1850 (24 points) is three points larger than a 61.8% pullback after a 34 point rally (1840-1874). The rally still looks okay. However, should the market drop below SPX 1840 then we are dealing with a very complex Minor 2, or the uptrend to SPX 1884 is over.
Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 pivot and SPX 1884. Short term momentum ended quite oversold. The short term OEW charts turned negative on the drop below SPX 1865. Best to your trading the day before Options expiration Friday.
MEDIUM TERM: uptrend
LONG TERM: bull market