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S&P 500 Pivots
The S&P 500, the Nasdaq, and the Dow all traded into positive terrority on the day of the FOMC announcement. However except for the Dow which traded above 11,000, both the S&P 500 and Nasdaq fell short of breaking their natural resistance levels of 1200 and 2500, respectively. Stocks rose after the FOMC announcement that fed funds will be low for an ‘extended period’ to promote economic stability and growth.
The market is mostly likely to be weak after the April 15th tax deadline. Since the S&P 500 is back below the natural support level of 1200 – the daily chart may indicate the beginnings of a trend change as we reach the ‘Sell in May’ prophecy.
Tomorrow both weekly jobless claims and natural gas report are due. Since there is no change in the FOMC’s fed funds target rate expect crude oil to go higher especially if jobless claims increase. Increased jobless claims will reinforce the Fed’s position of keeping interest rates steady.
However watch the dollar trade if it goes higher especially after the S&P downgraded
The market volatility index ended the day just above 20.85, which is the 144 Fibonacci moving average on the 5 minute chart. If the daily chart of the S&P indicate the beginnings of a trend change as we reach the ‘Sell in May’ prophecy then watch the market volatility index to stay way above it’s 52 week low of 15.23.
Summary of Pivot Levels:
1200: Natural Resistance Level
1195: Wednesday’s Previous High
1192: Wednesday’s Primary Pivot level
1189: Thursday’s Primary Pivot Level
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