The resilient market does it again as we saw new highs in several indices after a couple of days of shake-up. The Dow gained 93-points while 0.4% to 0.7% gains were seen almost across the board. With the Fed on deck today in day-two of their FOMC meeting, investors seemed eager to be all in before the 2 PM ET policy statement and press conference.
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Since the March to mid-April market swoon, we have not seen the S&P 500 fall for more than 2 consecutive days. That rotation that we have been talking about may have been giving the illusion of selling but investors were just moving their money. Once again the dip buyers were out in full force, even buying the stuff that was being rotated out of the other day, but when does that kind of action become over-complacency?
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The SPY (S&P 500 / C-fund) gapped up and made a new closing high yesterday in front of today's FOMC meeting, but may have hit a slight dose of resistance. Rallies to new highs before a rate increase has led to underperforming returns in the past. Will the Fed surprise us or is a rate hike coming today?
The DWCPF (S-fund) were shining again leading on the upside but it too is near some potential resistance after a big run up from 1178.
The Dow Transportation Index also poked its head on the other side of some resistance and may be a little stretched here.
The falling price of oil has certainly helped the Transports for the last several weeks, and we may be seeing a bear flag forming on the chart again. So, that's one reason why the Transports may be able to keep going higher.
The EFA (EAFE Index / I-fund) gapped up after a few days of pulling back but now it has to deal with the old support line, which could act as resistance. But in this bull market, it has been tough to bet against the up side as resistance has been cut through like a hot knife through butter.
The AGG (Bonds / F-fund) was up slightly as it flirted with a breakdown below support, but reversed higher and closed near the intraday highs.
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Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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