Coming into this week, the NASDAQ was poised to trade higher, while the rest of the markets Technical patterns, suggested that the averages were stuck in limbo and would stay that way, until something happened. Well, the trading on Monday and for the most part on Tuesday, that’s exactly what happened, with the NASDAQ moving higher, while the other Indexes treaded water. However on Wednesday, it was the Fed Chair, Little Janet Yellen from Fort Hamilton H.S., in Bay Ridge Brooklyn, my alma mater, that provided that much needed spark, to rally the markets, when she indicated that the FED, was more interested in reducing the FED’s balance sheet, instead of Raising Rates in 2017.
The Fed Chair’s surprise reversal, from Hawkish back to Dovish on Raising Rates, essentially told Investors, that Rates for the rest of 2017 would stay pretty much as they are, unless the U.S. Economy grew sharply (not likely) in the 2nd half of the year. The fact that money would remain easy for the rest of the year, was the equivalent of waving a red flag at a bull and the result was a surge in stock prices across the board, taking the DOW and Transportation Index to record closes at 21,532 and 9716, with all the other indexes, now within spitting distance of their highs.
Now with the FED on hold, (odds of rate hike in December just 40%), the only things Investors have to fear are a slowdown in the U.S. Economy and our Elected Fools in Washington. If the Economy performs modestly well and Washington does no harm, the markets should be okay for the rest of the year. This means any normal market correction, should be viewed as an opportunity, so do your work and then you will know, when an opportunity knocks.
Technically, the DOW, S&P and NASDAQ have more room to run, but the Transports and Russell 2000 are extended, so barring any negative surprises from Little Janet’s testimony in front of the Senate today, or from JPM, C and WFC earnings tomorrow, the markets should trade higher.
Overnight the Global markets traded slightly higher and in early trading our markets are up about 20pts on the DOW. The Yield on the 10 Yr is flat at 2.31%, the Dollar is lower, Commodities are mixed with Oil off a bit to $45.30 and the Metals up a bit.
Today we have the Weekly Jobless Claims and PPI Price Index for June out at 8:30am, followed by the Fed Chair’s testimony at 10:00am, hopefully everything goes as expected and markets go higher.
Today’s Early Markets
DOW Futures— up 20.00 London – up 12.58
S&P – up 200 DAX – up 34.56
GOLD—$1217 August Nikkei — up 1.84
OIL— $45.30 August HangSeng — up 302.78
DOW RESISTANCE 21,580 S&P RESISTANCE 2450
DOW SUPPORT: 21,450 S&P SUPPORT: 2440/2434
$NASDAQ RESISTANCE 6290
$NASDAQ SUPPORT 6220