COMMENT ON TODAY'S FED ANNOUNCEMENT and BRIEF MARKETS UPDATE (3:00 pm EDST)
Today the Federal Reserve announced that it would leave interest rates unchanged and also released projections suggesting that the Fed won't raise interest rates at all for the rest of the year. The broad stock market is surging up on this news (after falling significantly earlier in the day), and if this rally gains legs and pushes into next week, we will be out of our reversal zone and likely bypassing a corrective dip (which was probably starting with this mornings steep drop). In this scenario, we may have to wait for a top in our next reversal zone for equities (April 9 - 17). This bullish view hinges now on the DOW breaking above its Feb. 25 high of 26,241 and negating a strong intermarket bearish divergence signal against the S&P 500 and NASDAQ. If this Fed triggered rally can push the DOW over that line, equity markets could continue higher over the next few weeks. Still on the sidelines of the broad stock market.
The dovish announcement from the Fed could also push down the U.S. Dollar Index and boost precious metal prices. If this happens, it will be good for our long position in gold.
Crude oil may also take a cue from a strong equity rally and push higher into April; however, there is still the chance of a top in this week's reversal zone and a corrective dip. If prices push higher past Friday, though, we may need to wait a bit longer for that corrective dip to buy.
Today the Federal Reserve announced that it would leave interest rates unchanged and also released projections suggesting that the Fed won't raise interest rates at all for the rest of the year. The broad stock market is surging up on this news (after falling significantly earlier in the day), and if this rally gains legs and pushes into next week, we will be out of our reversal zone and likely bypassing a corrective dip (which was probably starting with this mornings steep drop). In this scenario, we may have to wait for a top in our next reversal zone for equities (April 9 - 17). This bullish view hinges now on the DOW breaking above its Feb. 25 high of 26,241 and negating a strong intermarket bearish divergence signal against the S&P 500 and NASDAQ. If this Fed triggered rally can push the DOW over that line, equity markets could continue higher over the next few weeks. Still on the sidelines of the broad stock market.
The dovish announcement from the Fed could also push down the U.S. Dollar Index and boost precious metal prices. If this happens, it will be good for our long position in gold.
Crude oil may also take a cue from a strong equity rally and push higher into April; however, there is still the chance of a top in this week's reversal zone and a corrective dip. If prices push higher past Friday, though, we may need to wait a bit longer for that corrective dip to buy.
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