Apparently the stock market was expecting something else from the Fed other than the same stance it has previously staked out, i.e. continued gradual rate hikes. Oh it did throw in a statement about business investment slowing down from its 'rapid pace earlier in the year,' but what it gave it took back, noting consumer spending 'has continued to grow strongly.' Subtract one, add one, no change. No mention of the recent market volatility.
Stocks sold starting 12:00ET, bounced into the FOMC, then rolled over again to new session lows.
SP500 -13.08, -0.46%
NASDAQ -59.58, -0.79%
DJ30 -47.42, -0.17%
NASDAQ 100 -0.91%
Despite the glum mood in the markets as they are unable to continue the WED move higher, the action for now is just a pause after a strong session. The 50 day MA stands just in front of SP500 and NASDAQ, a level that will have to be cleared, but again, the patterns are not bombing lower, just some backfilling after a big burst upside.
We will see market's next response to the FOMC now that the announcement has manifested in the initial stock move. That will definitely be the important one as many big names are at resistance, a natural decision point after a recovery bounce, e.g. NFLX, NVDA, AAPL, CRM, SQ -- after a follow through session these stocks need to show they can weather a bit of a pause then make the next important break higher. Today that question is not getting answered as this is a pure pause session.
Jon Johnson, Chief Market Strategist
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