Stocks pushed higher again on Tuesday, adding to gains posted the previous day, as concerns about the banking sector continued to ease. Attention now focuses on the Federal Reserve's interest rate decision, set to be announced on Wednesday.
As specially mentioned yesterday, the market is choosing direction and most likely it will go up, and I don't know how you guys feel, I personally feel the market is kind of overreact.
Chart: SPX 15 mins
Be honest, yesterday I was expecting the market can pull back and fill the open gap (green path line), in my opinion, yesterday's penning gap is more like a common gap instead of uncommon gap, so it tends to fill.
Now today's meeting will be very important, the Fed is between a rock and a hard place as the recent banking turmoil is a reason to pause, while inflation data supports another at least 25 basis point rate hikes.
Markets are widely expecting a 25-basis point hike. However, a small percentage of market participants expect the Fed to keep its benchmark rate unchanged.
And expect Chair Powell to strongly argue the banking system is safe, sound, and well capitalized, as a result, expect the Committee not to pause and risk signaling the banking system cannot withstand a 25-bp rate increase, nor risk admitting rapid front-loading may have been more risky than they previously assumed.
Chart: SPX 15 mins
Today, I personally do not want over optimistic about the FED talking, even FED agreed not keep raising its interest rate, but inflation is still there, it's not a win-win selection at all. Therefore, I am expecting the market will correct back to 21 EMA.
Please feel free to express your ideas and thoughts in the comment section.
As specially mentioned yesterday, the market is choosing direction and most likely it will go up, and I don't know how you guys feel, I personally feel the market is kind of overreact.
Be honest, yesterday I was expecting the market can pull back and fill the open gap (green path line), in my opinion, yesterday's penning gap is more like a common gap instead of uncommon gap, so it tends to fill.
Now today's meeting will be very important, the Fed is between a rock and a hard place as the recent banking turmoil is a reason to pause, while inflation data supports another at least 25 basis point rate hikes.
Markets are widely expecting a 25-basis point hike. However, a small percentage of market participants expect the Fed to keep its benchmark rate unchanged.
And expect Chair Powell to strongly argue the banking system is safe, sound, and well capitalized, as a result, expect the Committee not to pause and risk signaling the banking system cannot withstand a 25-bp rate increase, nor risk admitting rapid front-loading may have been more risky than they previously assumed.
Today, I personally do not want over optimistic about the FED talking, even FED agreed not keep raising its interest rate, but inflation is still there, it's not a win-win selection at all. Therefore, I am expecting the market will correct back to 21 EMA.
Please feel free to express your ideas and thoughts in the comment section.
