Major markets rose on lower volume. A lackluster response from leading names shows little playable as of yet on the long side. That said, number of European bourses hit new highs Tuesday, and the S&P 500 is just 1% off its highs, so a de facto resumption of the uptrend is near. If such should occur, it does not mean the MDM would automatically switch to a buy, but it is aware of how quantitative easing has had a tendency to push markets higher on light volume in baby step fashion.
Today marks the end of a 2-day Fed meeting so further assurance of low interest rates for a prolonged period would not be surprising. This could mean a continuation of the uptrend as S&P 500 and European bourses are at or near new highs. Price/volume in leading stocks and major indices, however, remains bearish.
The Fed is expected to continue with their taper, cutting QE by another $10 billion when they announced their latest policy today. With first quarter GDP coming in at 0.1% instead of the 1.0% that was expected, the Fed may find that they remain stuck for now. Investors should have short-sale targets at the ready should the market roll over, but avoid getting locked into a bearish frame of mind as the S&P 500 is close to making a new high which would then place the market back in a de facto rally. Today's action will likely be telling in this regard.
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