On Wednesday, the Federal Reserve’s announcement continued on past promises to cut back its bond buying program and keep interest rates low.
The $ 120 billion bond purchase program will first seek to cut $ 15 billion per month from year-end before moving on to an interest rate hike.
Looking through the eyes of major stock indexes, the S&P 500 (SPY) and Dow Jones Industrials (DIA) held up to the highs of previous days but were unable to close the gap created from Monday.
This is a pivotal price level to be cleared.
On the other hand, the Russell 2000 (IWM) and the Nasdaq 100 (QQQ) tested their 50-day moving average (DMA) before closing below them.
As traders expect a strong rally this weekend, the Federal Reserve’s announcement gave us no new information.
This shows that the market no longer has an incentive to run higher or a reason to break lower based on the latest update.
That said, from a technical standpoint, IWM and QQQ need to clear their 50-DMA while DIA and SPY need to close their gap created from Monday.
Analysis and summary of stock ETF trading:
S&P 500 (SPY) 441.02 is the void to be filled.
Russell 2000 (IWM) Must clear 50 day moving average at 220.91 and hold above.
Dow Jones Industrial Average (DIA) 345.06 is the gap to be filled.
Nasdaq 100 (QQQ) 369.94 minor resistance.
KRE (Regional banks) Must erase both 50-DMA and 200-DMA on 64.
SMH (Semiconductors) 260.43 supported.
IYT (Transport) 245.54 support. Resistance 249.69
IBB (Biotechnology) 169.42 50-DMA support.
XRT (Retail) Stress test of 50-DMA at 94.80.
VBK (Small Cap Growth ETF) 285.75 50-DMA. Must erase and hold more than 293.
GREEK (Greece) 27.70 is the lowest to hold.
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