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Fed Policy statement Wed. at 2 PM ET

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Stocks were mixed on Tuesday as the Dow shed 19-points while the S&P 500 was flat, small caps and the Nasdaq were up, and the Transports gained over 1%. The weakness in oil and McDonald's stock held the Dow back but overall it was a pretty good day for the broader market.

After the bell Apple surprised on the upside and that pushed the stock index futures, particularly the Nasdaq futures, higher in after hours trading. Twitter fell 10% after hours on a disappointing report, but it's not really a market mover like Apple or even Facebook, who reports today.

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So the leaders (Transports, small caps and Nasdaq) did well yesterday and the Nasdaq actually made a new 2016 high before the Apple earnings and should, at least temporarily, add onto those new highs to start the day.

The FOMC meeting is today and we expect the policy statement around 2 PM ET where the fireworks will begin. No changes are expected but their guidance or clues to futures moves could still shake things up.

The SPY (S&P 500 / C-Fund) remains in its flag, which is vulnerable to a breakdown, but could also remains in the flag for an uncomfortably long time - if it doesn't break to the upside first. These "F" flags don't normally break to the upside but with earnings beats and the Fed meeting, it may not act predictably.




The DWCPF (S-fund) made a new high for the year and remains in its rising flag formation. These slow steady rallies can really frustrate the bears and underinvested because there is no opportunities to get in for those waiting. A breakout to the upside could be met with the longer-term resistance (red dashed) and at that point it probably would need a break.




The Dow Transportation Index had a big day gaining over 1% on the day. It remains in a bull flag that seems to want to break out, but so far each time it has tested the top of the flag it has pulled back. That 8000 area is very important as it is where there is some long-term descending resistance (not shown) trying to hold it back.




The EFA (I-fund) made a mini-breakout out of a flag formation but needs some follow-through because there's nothing too explosive here yet. A move above 57.50, the July high, would help confirm a higher high, but right now this is just a modestly positive move.




The AGG (Bonds / F-fund) has been consolidating sideways for the last week or so, and I believe the Fed could lead the way on which way it breaks.




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Thanks for reading. We'll see you back here tomorrow.

Tom Crowley


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S&P500 (C Fund) (delayed)

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DWCPF (S Fund) (delayed)

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EFA (I Fund) (delayed)

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BND (F Fund) (delayed)

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