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Market Lab Report - Pre-Market Pulse for Thursday, March 22, 2018

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.
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