The FOMC meeting concluded today with another expected quarter point interest rate hike; however, the Fed's statement as well as Fed Chairman Jerome Powell's post-meeting press conference seemed to suggest that this hike may NOT be the last one this year. That was not expected (many analysts were suggesting it would be the last for 2023), and this cast a hawkish shadow onto late afternoon trading. Equity markets surged a bit into Powell's press conference but then fell sharply and lost all their gains by the market's closing bell.
Today was technically the last day of our strong reversal zone(s) for most markets. The DOW and S&P 500 made new weekly highs, but the NASDAQ stayed well below its high from last week, maintaining our strong bearish divergence signal in this last day of our reversal. This is strong evidence of a significant top forming now, but we will have to wait and see if it happens by Friday. Our stop loss for our current short position in the DOW is now based on the NASDAQ making a new weekly high (i.e. breaking above 14,447) or the DOW closing above 36,000 (whichever comes first). We note that if this market wants to rally some more, a top (which is now overdue) could spill over into next week's minor reversal zone that is centered around August 4. For now, we are still holding our short position in the DOW.