Several members of the Federal Open Market Committee said the central bank should begin tapering its bond buying program later this year and stop it by year-end, according to the record of the FOMC’s March 19-20 meeting released today in Washington. The market apparently took this positively, perhaps finding solace in the Fed’s increasingly positive views of the economy, and thus the U.S. stock markets are having good sized rallies today. The S&P 500 broke its all-time high today, with the JUN13 E-mini S&P 500 trading up 18 points to 1581, and the JUN13 E-mini Nasdaq trading up almost 2% to 2850.
Natural gas has rebounded strongly from yesterday’s short term correction to the key $4 level. MAY13 natural gas is trading up 3.44% to $4.15. We would not be surprised to see this market continue to trend higher to the $4.30 area. Crude oil is consolidating today, trading down just $.18 to $94.03. $95 looks like a key resistance area for the short term, and if crude cannot stay above $95, we look for a move down to below $90. This potential move downward could potentially help to propel the stock market even higher, as lower energy costs for companies and individuals might help to keep more income and profits in their pockets for investment and spending.
The precious metals markets are down today, with MAY13 gold down $16 to $1,570. We believe this market is headed to its low of $1,540 hit earlier this month. We believe this market could head lower from there, as more investors potentially pile in to the equity markets.
We focus our technical analysis on the S&P 500. Our next target for this market is 1615. This would be the top of another 80 point rally from its recent swing low area of 1535. The key pivot area is 1550 to 1560. The market has looked extremely bullish, staying above 1550. Considering the market broke all-time highs today, the sentiment seems to be very bullish and we would not be surprised to see the trend continue to our target.
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