For the most part, last week was flat with some bouts of choppiness. I think Fed Chair Janet Yellen and the Fed were drowned out by everyone’s anticipation of the inaugural address. The outcome was very predictable. The American people liked it and the mainstream media didn’t. The market jumped off a cliff during the speech but spent the rest of the day recovering after it.
The market has continued to consolidate higher this morning as it searches to test resistance at 1780-82.25. Yesterday's close was 1771.25, the market must hold this level and truly close above the pivot at 1775.75-1776.25 to keep sentiment positive.
The MAR14 E-mini S&P 500 is up 10.75 points to 1782, after recent corporate earnings reports, as well as an excellent reading on GDP, sparked investors to buy equities. 1775 is our key support level. Even with the second taper yesterday, the stocks are showing resilience, and climbing this morning.
Hump day is providing investors with a major speed bump before the market opens. The E-Mini contract is trading down to as low as 1772.25, almost 30-handles lower than the overnight high set just hours ago.
The S&P stabilized well by midday yesterday after putting in new lows reaching 1767. The FOMC begins its two day meeting today and many feel that the market has gone through a self-correction and that Bernanke and the Fed will remain on pace tapering.
Equities have retreated slightly from their two-day rally. The S&P reached a high of 1845.75 yesterday, the highest of the year, but failed to put in new all-time highs against 1846.50, which was seen on Dec. 31.
Equities began the much anticipated correction in yesterday's session as the S&P reached a low of 1809.50. The market did give traders a head fake early testing the Sunday night session high of 1838.75 with a failed high of 1838.25.