The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Rally into FOMC
Headlines remained uneventful and investors leaned gently towards risk as a result. The S&P opened about +25 and dipped to flat before rallying above 7730 before lunch. The index spent the remainder of the day in the 7730-7720 range, quietly holding meaningful gains on the day. Yields changed very little and crude dropped modestly over the day as well. Tech led the index higher and AI-themed investment stories are swirling around again. The faith in AI investments is rebuilding. The S&P broke above the 50-day moving average (7697) today. This is a nice short-term win for the bullish chart-watchers.
As nice as the upside breakout may look, whether it leads to more upside or a reversal is mostly dependent on what the FOMC says tomorrow. The expectation remains that they do nothing but what they may say is very uncertain. The Chairman has repeatedly stated that they will not offer forward guidance. There is no doubt that there will be no official projections of policy. However, the Chair has often said forward looking things that the Street rightly prices. Whether the Chair is slipping up or offering deliberate but unofficial predictions/expectations is a matter of debate.
Regardless of intentions, the Street is anticipating *some* tidbits of information that can be extrapolated forward. Who knows what those tidbits might be and who knows how significantly they might move markets. Rest assured that markets will be hanging on every utterance in the press conference.
And whatever the Street thinks it learns, will likely matter more for the trend of the next few days than the technical signals that showed up today.
See you tomorrow.
-Mike
Visdom Market Commentary
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