MARKETS UPDATE and COMMENT ON THE FED MEETING (4:30 pm EDT)
The Fed released its policy statement at 2 pm EDT today after a two day meeting. To no one's surprise, interest rates were left unchanged. The statement delivered a "stay the course" message saying that interest rate hikes would continue to be gradual (two more are expected this year) but that "...the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data." In other words, if economic conditions start to sour, they will likely slow down or stop hiking interest rates.
The DOW fell in early trading today but then climbed back up near the Fed's 2 pm statement release, backed down a bit after the release then rose again to close the day with a small 7 point gain. The S&P 500 and NASDAQ closed with small losses. Overall, it seems like the markets are comfortable with the Fed statement, but the DOW and S&P 500 still have not cracked their all-time highs. We are now entering a minor reversal zone for equities which will last through most of next week. If equities move lower now, this reversal could coincide with a sub-cycle bottom. This would be bullish as long as that bottom doesn't break below our stop loss points (20,379 in the DOW and 2,322 in the S&P 500). Holding my long position in the broad stock market.
It seems like gold finally decided to chase silver's steep fall as the price of both metals plunged strongly today and directional momentum in gold charts changed from 100% bullish to mixed bullish and bearish (silver is 100% bearish). Both gold and silver are now in the price range for a medium-term cycle bottom, and cycle timing indicates this bottom is due soon so we will watch for this as a possible buy spot; however, we don't want to see prices go too low. If silver falls below $15.65 and gold falls below $1,195, the longer-term trend could be turning bearish. Still on the sidelines of gold and silver.
The Fed released its policy statement at 2 pm EDT today after a two day meeting. To no one's surprise, interest rates were left unchanged. The statement delivered a "stay the course" message saying that interest rate hikes would continue to be gradual (two more are expected this year) but that "...the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data." In other words, if economic conditions start to sour, they will likely slow down or stop hiking interest rates.
The DOW fell in early trading today but then climbed back up near the Fed's 2 pm statement release, backed down a bit after the release then rose again to close the day with a small 7 point gain. The S&P 500 and NASDAQ closed with small losses. Overall, it seems like the markets are comfortable with the Fed statement, but the DOW and S&P 500 still have not cracked their all-time highs. We are now entering a minor reversal zone for equities which will last through most of next week. If equities move lower now, this reversal could coincide with a sub-cycle bottom. This would be bullish as long as that bottom doesn't break below our stop loss points (20,379 in the DOW and 2,322 in the S&P 500). Holding my long position in the broad stock market.
It seems like gold finally decided to chase silver's steep fall as the price of both metals plunged strongly today and directional momentum in gold charts changed from 100% bullish to mixed bullish and bearish (silver is 100% bearish). Both gold and silver are now in the price range for a medium-term cycle bottom, and cycle timing indicates this bottom is due soon so we will watch for this as a possible buy spot; however, we don't want to see prices go too low. If silver falls below $15.65 and gold falls below $1,195, the longer-term trend could be turning bearish. Still on the sidelines of gold and silver.
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