Today's Comments (Short Term Outlook)                            Printer  friendly

Stocks rally in front of Fed Stocks rallied sharply early yesterday morning, leveled out during the hours leading up to the Fed and, after a short volatile period after the policy statement announcement, stocks ended basically where they were just before the announcement.    The Fed says the economy is "leveling out".  That can be taken a couple of ways.  Yes, that is better than a falling economy, but it sounds like growth may be minimal going forward. As I said, the market was basically flat from the time of the announcement until the close, but investors did seem to want to buy out of the gate after Tuesday's sell-off. The S&P 500 rallied and is again up against that double resistance area - actually triple if we pulled back and looked at the longer-term chart.                  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The I-fund has been lagging in August as the dollar rallied sharply last week and is now bumping up against the longer-term resistance area.  That means it may be difficult for the [dollar's] rally to continue much longer, which would be a positive for the I-fund in comparison to the C and S stocks funds.                  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk With the put/call ratios (of the dumb money) still very bullish, the SentimenTrader.com Dumb Money Confidence indicator back over 70 (anything over 60 is "too high"), and with resistance firmly overhead, I am reluctant to jump on this runaway train, although it it becoming pretty clear that we may need to be buyers of pullbacks.  I am still hoping / expecting a more serious pullback in the range of 5% to 10% but it will be important for the S&P 500 to remain above the 200-day EMA and / or the rising support line - which are in the 930 to 950 area - if and when we get that pullback. That's all for today.  Thanks for reading!  See you back here tomorrow!