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Up and Down volume are fairly well matched, but price is struggling to maintain its current level and most of the range has been below VWAP. Meanwhile, the rising ten-day moving average continues to contain the downside; I’ll be watching that closely this afternoon session.
After 3 weeks, we finally had our first day of decent selling. Euphoria over the Federal Reserve’s low interest-rate announcement was reversed early on. The Fed is back on the sidelines and major earnings mostly done. What will be the catalyst for a further rally? That said, the dip buyers must be salivating to buy the first dip and throw in month end mark up we could still find some support in a day or two. I am thinking some reality of slowing economy and uncertain macro picture will hit us again after the new year money is spent.
Price action is taking a mild breather after yesterday afternoon’s post-FOMC run.
Chairman Ben Bernanke made it clear that the Fed is ready, willing and able to act should the economy falter. The Fed feels the economy is weak enough to justify keeping interest rates low until the end of 2015, but the prospect of endless QE had the bulls in a buying mood. The big question now is how long we can run with QE optimism?
Positive tick has me thinking this congestion zone just below the pivot breaks to the upside. How price will do at SPY $132 resistance remains to be seen.
Blue-lined markup comparison of the January versus December Federal Open Market Committee statements below.
- Slowing Growth
- Inflation Subdued
- Continued Accommodative Stance
- Low Rates Expected to Late 2014
- One Dissent
Don’t forget the first reaction is often a fade, but price can move quickly. Also see past Fed-Day reactions on this site, and prior statement markups here.
[Click Graphic Below to Enlarge]
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