It is a bit too early to tell what will come of today’s action and it is probably best to let this stew simmer overnight.  The Federal Reserve Board did not shock anyone with another ¼ point rate hike today and while our interpretation of the verbiage is that it is only slightly more dovish, participants were very quick to bid the broad markets higher initially. That move faded into the close but overall stayed positive. The buying was concentrated in Financials and breadth was only slightly positive. Furthermore, during the euphoric activity the small caps didn’t participate to the extent we would have liked to see, which causes a little concern.  

On a bullish note, the technicals are set up well and the S&P and Nasdaq are on the launching pad to test highs on the year. The semiconductors have recovered and many earnings winners look to be set up to move out. On a bearish note, we have been finding many oil and gas charts that look very ripe. Should theses stocks advance and spark momentum buying, while we would participate, a market led by oil is not something we would like to see. 

We seem to be able to make a good case for a move either way but as long as we hold above recent lows the upside has the benefit of the doubt. That doesn’t mean we are plunging in unabated but maintain a bias toward committing new capital.