Wednesday update

SHORT TERM: FED raises rates 25 bps, DOW +224

Overnight the Asian markets gained 1.8%. Europe opened higher and gained 0.4%. US index futures were higher overnight. At 8:30 Building permits were reported higher: 1289K v 1150K, Housing starts were reported higher: 1173K v 1060K, and at 9:15 Industrial production was reported lower: -0.6% v -0.2%. The market gapped up at the open to SPX 2059, ticked up to 2060, and then began to pullback. The SPX had closed at 2043 yesterday. The pullback continued into the afternoon when the SPX hit 2046 at 1pm. Then, as is custom, the market gradually rose into the FOMC statement hitting SPX 2056 just before the 2pm announcement. At 2pm the FED released a report and statement:, and The market reacted in its usual volatile fashion. Within minutes of the announcement of a rate hike the market sold off to SPX 2042, rallied to 2064, then dropped to 2049 by 2:30. After that the market rallied to SPX 2077 by 3:30, then pulled back to end the day at 2073.

For the day the SPX/DOW gained 1.35%, and the NDX/NAZ gained 1.50%. Bonds lost 13 ticks, Crude dropped $1.70, Gold rallied $12, and the USD was higher. Medium term support rises to the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: weekly Jobless claims and the Philly FED at 8:30, then Leading indicators at 10am.

The market gapped again today for the second day in a row. After hitting a new rally high at SPX 2060 the market pulled back to 2042 after the FED announcement. After that it rallied in three waves SPX: 2064-2049-2077. We have labeled on the hourly chart the five waves up to SPX 2060 as Minor 1, the pullback to SPX 2042 as Minor 2, and Minor 3 underway from that low. These waves are all within Intermediate wave one of the potential, yet unconfirmed, Major wave 3 uptrend. With year end options expiration still to go, this wild week is not quite over just yet. Short term support is at the 2070 pivot and SPX 2040’s, with resistance at the 2085 pivot and SPX 2104. Short term momentum displayed a negative divergence at the morning high, pulled back, and then ended the day quite overbought. Best to your OPEX trading!

MEDIUM TERM: market looks to be uptrending

LONG TERM: bull market


About tony caldaro

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313 Responses to Wednesday update

  1. rc1269 says:

    That end of day flush must have been Lee clearing out the last of his positions for the year…


  2. well at least given this down move you would have expected the VIX to skyrocket 5-10% right? not the case and right at 18 and the trend is still down

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