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The S&P 500 originally trying to break above the 2750 level during the day on Wednesday, but as the FOMC minutes came out, the market rolled over and broke below the 2700 level. I think the market is struggling to come to grips and understand exactly what the meeting minutes mean, especially considering that we have seen inflationary number since then. At the end of the day, we ended up losing about 0.75%, hardly a bloodbath. Because of this, I think that if you are patient enough, you should get a buying opportunity below.
While we have broken below the 2700 level, I think there is a significant amount of support just below, and most certainly extending down to the 2650 level. I am waiting for some type of bounce or supportive hammer on the hourly chart to start buying. I don’t have any interest in shorting, although I realize that we could go lower than the 2650 level. We are still very much in an uptrend, and the economic outlook for the United States is still strong. I think that this might have been some of the “cheap money traders” jumping out of the market. This would have been mainly a reaction to the US dollar rising and the 10-year yields rising, but at the end of the day that’s nothing new. This knee-jerk reaction will probably be but a blip on the radar down the road when we look back.
S&P 500 Video 22.02.18
This article was originally posted on FX Empire