Market Recap, Bernanke, and Oil
***Written By: Teresa Appleton Stock Forum ID: Teresa***
Wednesday wraps up the middle of the week and we ended hump day on a green note. Volume increased today over yesterday leaving the market with an accumulation day. Nice day for the bulls which leaves us at resistance still at multi year highs.
The FOMC meeting did not give us any information we didn’t have already. The statement didn’t enlighten us and still leaves the door open for further increases. After 17 increases and now two no changes the monetary policy is still on a wait and see status. I don’t think we are going to see the data dependent status alter with Fed Chair Bernanke. I think he is a take it as it comes kind of guy, which is different than Greenspan, but seems to be his style. All but one member voted to hold the interest rates and have no change and said that inflationary pressures are being taken care of by a slower economy. They did add that inflation pressures will moderate over time, but that some inflation risk is still remaining. Which is the wait and see mentality.
Second straight day oil feel ending the day down $1.20 at $60.46. Inventories were split again this week with rises in distillate and gas and draw down in crude. Gold increased by days end up $3.00 to close at $586.20. Gold closed prior to the fed announcement so the after hours session we did see gold decline, which is normal given the no rate change information.
Overall the day was very boring, the worst FOMC action I’ve ever seen. The market had this pause so priced in and the statement didn’t really create any excitement that we had very little reaction. Leaving us very wound up for a move to come. By the way the next FOMC meeting is a two day meeting October 24-25th. Thursday we have a lot of data to come and the market is very wound for a move. So as I see overnight futures drift lower I would still look for our pullback to test Wednesday’s lows and a gap is still open.
ES finished the day and left the gap open. Support at 1333.25-1332.25 should be watched closely. A break of that support would likely let us fill the gap down at 1330.75. That support will be good and should be an area we spend sometime at if the market weakens Thursday. A move under 1330.75 would drift us down into 1326.5. The weekly pivot is 1323.75, which happens to converge with 38.2% fib support, this will still be the spot to watch and support to hold. Resistance is 1336.75, 1339.75, 1342.75 and 1345. Thursday’s pivot is 1336.25, which is very likely to come into play tomorrow.
Economic Data for the week of September 18th–22nd Thursday 08:30 Initial Claims, 10:00 Leading Indicators, 12:00 Philadelphia Fed, Friday nothing released today.
Earnings Data for the week of September 18th – 22nd Thursday pre market AGE, CCL, FDX, GIS, RAD, SCHL and after the bell COMS, ESIO, EGLS, NKE, PALM. Friday pre market KBH.
Lets look at some charts:
NDX (Nasdaq 100) closed +24.28 at 1645.35. Support: 1628.72 200dma, 1612.20, 1612.00 10ma, 1596.37 20ema and 1576.88. Resistance: 1651.00, 1680.52, 1701.98 and 1721.13.
