All eyes were on the Fed Tuesday afternoon as the bulls were trying to extend their rally while the bears were hoping for a miracle. Like a broken record, the Federal Open Market Committee (FOMC) once again said it would maintain interest rates at their current record lows of 0%-0.25% after saying the “economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment.”
The market held its gains for a little while after the news but started to give them back in the final hour as the bulls and bears debated other meeting minutes. The central bankers have to be careful in their wording, obviously, because they know the world is watching QE2 closely.
The Dow added 48 points, or 0.4%, to finish at 11,476. The index managed to trade to a high of 11,514 and our near-term target is 11,600-11,700 by yearend. We believe a run to 12,000 is in the cards but it probably won’t happen until 2011. Support is at 11,200 and 11,000.
The S&P 500 traded to a peak of 1,246 but settled with a slim 1 point gain to 1,241. We are looking for a close above 1,250 which is current resistance before a run up to 1,275-1,300. Support remains 1,220 and 1,200.
The Nasdaq chipped in with a 2 point win and closed at 2,627 after touching 2,636. Both the Nasdaq and S&P 500 fell briefly into the red in the afternoon yesterday, before rebounding, and we are looking for a close above 2,660 for Tech. If the index can reach this level, then we have a shot at 3,000. Support is at 2,550-2,500.
Futures are pointing towards a lower open this morning and we knew last night when we saw the dollar rising and the euro tanking, the market would struggle at the open today. Moody’s (MCO, $27.33, up $0.08) decided to “warn” the market that it might lower Spain’s credit rating. Really? Long-time readers know how much we hate Moody’s because the rating agency is always late to the party and this is something the market already knew.
As we head to press, Dow futures are lower by 25 points to 11,396; S&P 500 futures are down 3 points to 1,233; the Nasdaq 100 futures are off by 6 points to 2,208. We closed two trades yesterday for gains of 140% and 170%, respectively, and we are looking for more. Subscribers, check the Members Area for the latest trade updates.]]>