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Fed Juices Stocks

S&P FedDouble Click any image for a full sized view

Just a short note to let you see what happened to the stock market when the Fed released its meeting notes.  It was no surprise to read that they were concerned about global growth and slowing US economic numbers so they put off the September rate increase until later.

The Skynet kicked into gear and pushed the index above the 50-day moving average that we looked at yesterday as resistance to close at a reading of 2013.

Below is the same graph from yesterday except updated for today’s action.

S&P 500 Today #2If you double click the image you will see that we moved decisively above the 50-day moving average, but the short-term indicators we looked at yesterday (RSI and CCI) are both also decisively into over-bought territory.

I still see a pullback, but it will be interesting to see if the 50-day has turned into support from resistance.  Long time readers of the blog will remember my Rule of 3 – any break of support or resistance has to be sustained by either 3% or 3 trading days.  If it falls (or rises) back below previous resistance (or above previous support) then breaking those levels does not count.

Also of note, our intermediate term indicators have moved more solidly positive with today’s market action – a positive thing for the intermediate future.

So, tomorrow will be a really interesting day – will we finally get the pullback that the RSI and CCI tell us is coming and can the 50-day act as support?  Or, is there any chance we will knock on the door of the 200-day moving average and see the RSI  and CCI get REALLY over-bought?

We will see!

Mark