Market indexes reversed after a sharp upside response to the Fed raised the Fed Funds rate 25 basis points to 1.75%. The bearish reversal occurred after an initial rally that saw the Dow up over 200 points intraday, but by the close the Dow closed down -44.96, or -0.18%, while the S&P 500 also closed down -0.18%. The NASDAQ Composite traded down -0.26% or, -19.01 points, on slightly higher volume, logging another distribution day after Monday's failure at the prior new-high breakout point.
Futures are off more than -1% at the time of this writing. Besides concerns about a potential trade war between the U.S. and China, the Federal Reserve had a "middle" ground message after yesterday's policy meeting which left markets uncertain about future interest rate policy. Uncertainty makes markets nervous. But with Fed Fund rates at 1.75%, can the Fed really hike another 3 or 4 times? Once rates rise beyond 2%, a stronger dollar would dampen emerging market growth. This could force the hand of various global central banks to prematurely hike rates when they have no room to do so. In addition, a stubborn 2% rate of inflation due to lack of demand despite interest rates still at or near all-time lows puts a cap on how high rates can go. So while the Fed would love to normalize rates back toward historical norms, the market will not allow it.
Focus List Notes:
AMZN held tight along its 10-dma after finding support at the 20-dema on Monday. Volume dried up to -29.9% below-average yesterday.
BB is holding tight and above the 12.99 low of Tuesday's gap-up move, which can be viewed as a pocket pivot and quasi-buyable gap-up move. If buying shares here, use the 10-dma as a selling guide for those shares.
NVDA, which found support at the 50-dma on Monday and is now back above the 10-dma, held tight at the line as volume dried up to -33.2% below-average.
TEAM has pulled into its 20-dema. Volume picked up slightly but was still above-average, so the stock can be viewed as buyable at the 20-dema but one should be ready to back away if the stock can't hold the 20-dema.
Market Lab Report - Pre-Market Pulse for Thursday, March 22, 2018
|Published:||22 Mar 2018 08:52 ET|
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2022 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.