Will Wednesday's Momentum Continue Or Fade?
Michele Schneider | Dec 15, 2021 11:28PM ET
Wednesday, investors waited for the FOMC minutes release at 2 PM EST to see whether the Fed would be hawkish or dovish in its response to the recent Producer Price Index report (PPI).
With the PPI showing inflation rising rapidly, the market gapped lower Tuesday on an expectation that the Fed would be forced to step in and decrease inflation. Typically, the Fed uses tools such as raising interest rates to offset increasing inflation.
However, Wednesday's FOMC minutes came in neutral showing that the Fed isn’t looking to upset the market, but is still concerned.
So far, the Fed has decided to keep rates near zero, but has agreed to reduce bond-buying by 30-billion per month.
Having said that, the 4 major indices rallied with the S&P 500 (SPY), the NASDAQ 100 (QQQ), and the Dow Jones (DIA) rallying back into resistance from the last weeks' highs while the Russell 2000 (IWM) closed over recent lows.
With a potential gap up today, these are the levels to clear or hold over if we expect the market to continue higher:
- SPY $470.65
- QQQ $401.99
- DIA $360.33
When it comes to IWM, there is no main resistance level to clear as it’s been rangebound for most of 2021. Instead, watch for IWM to stay over its support area around $214.
If the initial market reaction from the FOMC is sustainable, watch for these key price levels to clear or hold over.
h2 ETF Summary/h2- S&P 500 (SPY) Needs to clear 470.65
- Russell 2000 (IWM) 214.22 support area to hold.
- Dow (DIA) 360.33 to clear.
- NASDAQ (QQQ) 401.19 to clear.
- KRE (Regional Banks) 67.95 200-Day moving average support.
- SMH (Semiconductors) 318.82 high to clear.
- IYT (Transportation) 267.63 needs to clear.
- IBB (Biotechnology) Watching for a second close over the 10-DMA at 149.52.
- XRT (Retail) Like this to stay over 88.75.
- Junk Bonds (JNK) Needs second close over 108.28.
- SLV (Silver) Watching to clear 20.59.
- USO (US Oil Fund) 52.66 to clear.
- TLT (iShares 20+ Year Treasuries) 151.77 needs to clear.
- DBA (Agriculture) 19.50 support area.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.