Stock Market Waiting for the FOMC?
Stock-Markets / Stock Markets 2016 Dec 13, 2016 - 02:31 PM GMTGood Morning!
The SPX Premarket is higher, but the futures have not made a new high. Yesterday’s decline may be impulsive, but the test is whether a new high is made today or not. In addition, the Wave structure appears to be complete as of yesterday morning. We may see some residual bullishness at the open, but the jury is still pondering the verdict as of now.
You can see even ZeroHedge is bullish as it writes, “Yesterday's brief hiccup in what has been an otherwise relentless rally in global risk assets is all but forgotten this morning, as European and Asian stocks, and US equity futures, all rise in quiet trading ahead of tomorrow's FOMC meeting, with the Dow set to make a 16th consecutive post-election all time high.”
The FOMC begins its meeting tis morning and the typical response of the market is to rally. This may be a “buy the rumor, sell the news” event. The last time this happened, the market wasn’t quite as positive as is normally the case.
In addition, Options Expiration is this week with VIX options expiring on Wednesday.
VIX futures are modestly lower today, The futures do show a new low, while the cash market does not. So, there is a 50-50 probability of going either way. That is, either the VIX makes a new low at or below 11.02 or it breaks out, giving us a market signal. The pattern favors the breakout at the moment.
I’m not sure we will get any resolution until tomorrow, however.
TNX appears to have complete Wave [b] and may be ready for a decline into the same projected Master Cycle low as the SPX. Confirmation comes with the crossing of Intermediate-term support at 23.71.
I will be in conference all morning and may not be back for commentary until this afternoon.
Regards,
Tony
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