SHORT TERM: rally continues, DOW +25
Overnight the Asian markets gained 0.5%. Europe opened higher and gained 0.3%. US index futures were higher overnight. At 8:30 the CPI was reported lower: -0.2% v +0.1%. The market opened unchanged at SPX 1999, rallied to 2004 by 10am, then started to drift lower ahead of the FOMC statement. At 10am the NAHB was reported at a 9 year high: 59 v 55. By 1:30 the SPX had hit 1997, and then started to rise. At 2pm the FED released several reports: http://www.federalreserve.gov/newsevents/press/monetary/20140917a.htm, http://www.federalreserve.gov/newsevents/press/monetary/20140917c.htm, http://www.federalreserve.gov/newsevents/press/monetary/20140917b.htm. The market responded by initially rising back to SPX 2004, then dropping to 1993, and then rallying to 2008 by 2:30. Normal volatility after a FOMC statement. Then after a dip to SPX 2002 just before 3pm, the market rallied to the all time high at 2011 just past 3pm. Another pullback followed to SPX 2000 by 3:30. Then the market bounced to close at 2002.
For the day the SPX/DOW were +0.15%, and the NDX/NAZ were +0.20%. Bonds lost 10 ticks, Crude dropped 75 cents, Gold slid $14, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: the ECB concludes its two day meeting, then weekly Jobless claims, Housing starts and Building permits at 8:30. A speech from FED chair Yellen at 8:45. Then the Philly FED at 10am.
We had a quiet opening to the typical volatile FOMC day. At 10am the SPX hit 2004, twenty-six points above Monday’s 1978 low. Then after a small pullback the market hit SPX 2004 again right after the FOMC statement. After that the market had its first notable pullback to SPX 1993. Then the market retested the all time high at SPX 2011, before pulling back again into the close. Several reversals is nothing unusual for an FOMC day. The important day, as we see it, is tomorrow. After traders have had the opportunity to digest whatever news resulted from the FED’s meeting. Counts remain the same.
Short term support is now at SPX 1993 and the 1973 pivot, with resistance still at SPX 2011 and the 2019 pivot. Short term momentum displayed a negative divergence at the SPX 2011 high and pulled back. Best to your trading the ECB day!
MEDIUM TERM: uptrend
LONG TERM: bull market