Shares dropped on Tuesday amid weak predictions from a couple of major retailers and ongoing concerns about interest rates. The Fed worries flared up again during Wednesday's trading, following the release of the minutes of the last central bank meeting, which ended with a rate hike of 25 basis points.
The minutes showed that some Fed officials favored raising the key rate by 50 basis points, suggesting ongoing concerns about inflation. The info also indicated that policymakers could return to a more aggressive approach if necessary to tame price increases.
This hawkish signal from the Federal Reserve prompted late-day selling on Wall Street, with the Dow and S&P 500 eventually finishing Wednesday's session in the red. The retreat added to a substantial decline recorded during the previous session. The Nasdaq showed weakness into the final stages of the session but scrambled above the flat line just before the close.
Chart: SPX daily and 5 mins
From the tech side of analysis, SPX gave a red doji on the daily, touched 3970ish and closed around 3990ish. As we expected yesterday, we think the market would likely to trace back to 8&21 EMAs if nothing worse happened. Hawkish signal from the FED prompted market close selling, and course the market unable to hold the "day low" that was made at 10:30am. However, the good news is 3970ish level tech buyers get in prior to the market close and pull the market up a little bit.
For today, I will still focusing on some buying opportunities. Higher interest rates from what we have seen so far will only serve to weigh on the economy further. Having said that, the fact that they are likely to go up slower than what others might have anticipated means that most of the pain may already be factored in.
Chart: SPX 30 mins and 5 mins
From 30 mins chart and daily chart, the market is still extended from 8&21 EMAs, if 3970ish level can be trusted, then 3970-4030 might be the zoom for day play. IF looking for bigger and longer picture, the best opportunities moving forward will be value-oriented stocks that would normally be harmed by higher interest rates and higher inflation, because many of these have been held down lower than what they should have been.
Please feel free to express your ideas and thoughts in the comment section.
The minutes showed that some Fed officials favored raising the key rate by 50 basis points, suggesting ongoing concerns about inflation. The info also indicated that policymakers could return to a more aggressive approach if necessary to tame price increases.
This hawkish signal from the Federal Reserve prompted late-day selling on Wall Street, with the Dow and S&P 500 eventually finishing Wednesday's session in the red. The retreat added to a substantial decline recorded during the previous session. The Nasdaq showed weakness into the final stages of the session but scrambled above the flat line just before the close.
From the tech side of analysis, SPX gave a red doji on the daily, touched 3970ish and closed around 3990ish. As we expected yesterday, we think the market would likely to trace back to 8&21 EMAs if nothing worse happened. Hawkish signal from the FED prompted market close selling, and course the market unable to hold the "day low" that was made at 10:30am. However, the good news is 3970ish level tech buyers get in prior to the market close and pull the market up a little bit.
For today, I will still focusing on some buying opportunities. Higher interest rates from what we have seen so far will only serve to weigh on the economy further. Having said that, the fact that they are likely to go up slower than what others might have anticipated means that most of the pain may already be factored in.
From 30 mins chart and daily chart, the market is still extended from 8&21 EMAs, if 3970ish level can be trusted, then 3970-4030 might be the zoom for day play. IF looking for bigger and longer picture, the best opportunities moving forward will be value-oriented stocks that would normally be harmed by higher interest rates and higher inflation, because many of these have been held down lower than what they should have been.
Please feel free to express your ideas and thoughts in the comment section.
