Are Falling Stocks Ahead Of Today's Fed Meeting A New Trend?
Sunshine Profits | Dec 15, 2021 10:07AM ET
Stocks went lower yesterday, as investors took profits off the table ahead of today’s FOMC release. Was it a reversal or just a correction?
The S&P 500 index lost 0.75% Tuesday, as it broke below its recent trading range. The broad stock market’s gauge retraced some of its rally and it got back below the 4,650 level. On the previous Friday, the index fell to the local low of 4,495.12 and it was 5.24% below the Nov. 22 record high of 4,743.83. Then, we saw another attempt at getting back to the all-time high and on Friday the index closed the highest in history.
So was yesterday’s decline only a correction?
For now, it looks like a downward correction, but we may see some more volatility following today’s FOMC release and tomorrow’s European Central Bank and the Band of England release. Today, the index is expected to open virtually flat and it will likely trade within a consolidation before the Fed release at 2 p.m.
The nearest important ):
Tech Stocks Are Relatively Weaker
Let’s take a look at the Nasdaq 100 chart. The technology index bounced to the resistance level of 16,400. Tech stocks remain relatively weaker, as the Nasdaq 100 is closer to the early December local lows.
Conclusion
The S&P 500 index will likely trade within an intraday consolidation before the Fed release today. Then we may see an increased volatility in stocks, currencies and commodities. The S&P 500 index trades within a downward correction and we may see more profit-taking action in the near term.
Here’s the breakdown:
- The S&P 500 is expected to open virtually flat ahead of today’s FOMC release.
We are maintaining our short position from the 4,678 level.
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