The Fed Cloud Prevails, for Now
The over reaching FED is a force that all investors must keep in the back of their mind. At the moment, the S&P price level swing low of 1812.29 set on 1/20/16 is kind of the FED’s breakpoint. A market close under that level would be the first real indication since September 2012 that the FED is not the BIG Force.
This week , at least for today, the FED is the big factor. Market analysts ponder whether the FED started the recent decline and whether they will say something that will give the market bullish courage again. As you know for me, that is not the point. My comment a few days ago about the possibility of a eight to ten percent bounce in the market from the 1812 S&P low is based around two things 1) FED comments, and 2) A 38 to 61 percent Fibonacci bounce, ie. a S&P price level of 1914 or 1976. So far we have seen a bounce to 1908, last Friday.