Mr. Market?s Wild Ride
Today’s Spotlight Market
Political debate may have captured the eyes of news devotees on Wednesday, but all eyes were on the Federal Reserve on Thursday afternoon. The Fed elected to not raise rates and the markets reacted like a bucking bronco. The equity markets couldn?t pick a direction, vacillating wildly between gains and loss. Treasure Bond futures rocketed and Gold joined the rally on Friday. Since no press conference is scheduled for the October Federal Open Market Committee meeting, the next chance for a rate increase is likely in December.
Fundamentals
The past week saw the release of a great deal of economic data, most of it being bullish for the equity markets. Retail sales for August rose 0.2%, Inflation as measured by the Consumer Price Index, actually dropped by 0.1%. Finally, initial jobless claims fell by 11,000 for the week ending September 12 to 264,000, showing ongoing strength in the labor market. Still, the recent period of volatile international equity markets and potential slowing growth abroad was enough for the Fed to keep rates at their historically low level.
Technical Notes? -? View Today’s Chart
Turning to the 3 month continuation chart for the E-mini S&P 500 futures, we see some very choppy trading over the past month. Last week?s trading saw the E-mini break above the 20 day Simple Moving Average (SMA), which had been a previous resistance level. As is common, a previous resistance level becomes a support level. Short term traders will be watching to see if this support holds. The E-mini is still trading below both the 50 day and 200 day SMAs, a bearish sign. 14 day RSI is a neutral 43.69. Long term resistance can be found around the 2100 level with 1900 serving as a longer term support level.
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