BRIEF COMMENT ON THIS WEEK'S FEDERAL RESERVE MEETING (5:30 pm EST)
After today's FOMC meeting, the Fed announced an interest rate hike of 0.25% (the rate will go from 1.25% to 1.50%) which was mostly expected by analysts. The FOMC's statement also seemed to indicate that the Fed will be "staying the course" of gradual rate hikes in 2018 (three are expected next year). The DOW rallied a bit before the FOMC announcement at 2:00 pm EST but closed the day significantly off its high. The NASDAQ also rallied intraday but lost most of its gain at closing. Significantly, the NASDAQ was still not able to make a new weekly high (above 6,915) so our bearish divergence signal is still in place. Its hard to say if markets will push higher tomorrow as the Fed's statement was not excessively dovish or hawkish. Janet Yellen's final speech (she will step down as Fed Chairwoman early next year) was also tempered although she did express a general optimism about the U.S. economy. Tomorrow's ECB meeting could also affect equity markets as some analysts think Mario Draghi could deliver a "hawkish surprise" to European markets by pulling back on QE (quantitative easing) policy. All of these factors could make markets volatile for the rest of this week, but we will stick to our cycle analysis and the idea of a top in this market soon. We are also ready to cover our short position in the broad stock market should the NASDAQ exceed its 6,915 high. Still holding my short position here.
After today's FOMC meeting, the Fed announced an interest rate hike of 0.25% (the rate will go from 1.25% to 1.50%) which was mostly expected by analysts. The FOMC's statement also seemed to indicate that the Fed will be "staying the course" of gradual rate hikes in 2018 (three are expected next year). The DOW rallied a bit before the FOMC announcement at 2:00 pm EST but closed the day significantly off its high. The NASDAQ also rallied intraday but lost most of its gain at closing. Significantly, the NASDAQ was still not able to make a new weekly high (above 6,915) so our bearish divergence signal is still in place. Its hard to say if markets will push higher tomorrow as the Fed's statement was not excessively dovish or hawkish. Janet Yellen's final speech (she will step down as Fed Chairwoman early next year) was also tempered although she did express a general optimism about the U.S. economy. Tomorrow's ECB meeting could also affect equity markets as some analysts think Mario Draghi could deliver a "hawkish surprise" to European markets by pulling back on QE (quantitative easing) policy. All of these factors could make markets volatile for the rest of this week, but we will stick to our cycle analysis and the idea of a top in this market soon. We are also ready to cover our short position in the broad stock market should the NASDAQ exceed its 6,915 high. Still holding my short position here.
RSS Feed