Here we are again with the S&P 500 between 1302 and 1305

The market did The Fed shuffle yesterday as the major indexes made back all or most of the losses from Tuesday's Fed induced big losses. 

In Tuesday's comments we said;

"There is a tendency for the market to move one way after the interest rate and monetary policy announcement, and reverse the action a day or two later.  Since the announcement is after our 12 noon ET deadline, there isn't much we can do to take advantage of it."

If we had a little more flexibility in our TSP accounts we might have been able to take advantage of the overdone Fed sell off but alas, we don't have that luxury.  We are put in a position to decide what is going to happen in the next several days to weeks.  No day trading here.

As good as yesterday was, the Dow and S&P 500 did not make higher highs over the prior day.  As I mentioned in yesterday afternoon's blog, both of those indexes put in an "inside day."  Tuesday's low was lower than yesterday’s low, and Tuesday's high was higher than yesterday's high.  The S&P 500 is back in that 1302 to 1305 range.  Eight of the last 11 closes have been in that range.

The Nasdaq and the small caps, including our Wilshire 4500 (S fund) did make a higher high.  Is tech finally going to take the lead in this market?  It is almost a necessity for a strong bull market.

                                   Chart provided courtesy of www.decisionpoint.com

These inside and outside days are not very common, but the S&P 500 had an inside day on Monday, which is a continuation pattern, then an outside day on Tuesday, which is considered a reversal pattern, and now another inside day on Wednesday.  Very peculiar action but I guess The Fed has that type of power over equities.

The short term indicators aren't really giving us any indications.  Many of them are in neutral territory.  The intermediate term is still the one struggling but the market has shrugged off all of those warnings over the past several months. 

Those traders who just stick with what the market is giving them are doing OK, but they are getting a heck of a ride for their money.  If the market does pull back quickly, these are the people who will be hurt the most - just as they will be rewarded the most on any more upside action.

I am still thinking the upside is limited.  I believe any move to new highs here will be short lived.  We haven't had a decent buying opportunity in a long, long time and I think you'd have to go back 1995 to see a year where if you waited you really missed out. 


                                   Chart provided courtesy of www.decisionpoint.com

Could we be seeing that again or will the rug get pulled out from under the market some time soon?  You know my call.  What's yours? 

That's all for today.  Currently 100% G fund.  Thanks for reading.  See you tomorrow.
 

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