SHORT TERM: FED raises rates 25 bps, DOW -119
Overnight the Asian markets lost 0.2%. Europe opened lower and lost 0.5%. US index futures were flat overnight. At 8:30 retail sales were reported higher: +0.1% v +0.8%, and the PPI was reported higher: +0.4% v 0.0%. Then at 9:15 industrial production was reported lower (-0.4% v 0.0%), as well as, capacity utilization (75.0% v 75.3%). The market opened 4 points below yesterday’s SPX 2272 close. After a small rally to SPX 2273 in the opening minutes the market pulled back to 2265 by 11:30. At 10am business inventories were reported lower: -0.2% v +0.1). Heading into the 2pm FED announcement the market rose and hit SPX 2276 soon after the following reports: https://www.federalreserve.gov/newsevents/press/monetary/20161214a.htm, and https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20161214.pdf. The market then pulled back to SPX 2248 just past 3pm. Then after a rally to SPX 2265 in the last hour of trading the market pulled back to close at 2253. Another volatile FED day!
For the day the SPX/DOW lost 0.70%, and the NDX/NAZ lost 0.4%. Bonds lost 29 ticks, Crude dropped $2.05, Gold slid $15, and the USD was higher. Medium term support drops back to the 2212 and 2177 pivots, with resistance at the 2270 and 2286 pivots. Tomorrow: weekly jobless claims, the CPI and the NY/Philly FED at 8:30. Then the NAHB at 10am.
The market opened lower today, bounced, and then hit SPX 2265. After that it rallied to SPX 2276 just after the FED raised rates to 0.75%. Then the market “sold the news” and the SPX dropped to 2248 before rebounding some into the close. We can count 9 small waves up from the Minute ii low at SPX 2187, and then today’s pullback. We are going to count this activity as the first-second waves of Minute iii, unless, the SPX continues to decline into the 2220’s. Then the recent high would labeled Minute iii, and this decline Minute iv. Still expecting higher prices ahead for this uptrend either way. Short term support drops to SPX 2252 and SPX 2243, with resistance at the 2270 and 2286 pivots. Short term momentum dropped to quite oversold during the pullback. Trade what is in front of you!
MEDIUM TERM: uptrend
LONG TERM: uptrend