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MENAFN- Daily Forex)
The S&P 500 looks particularly strong as we are breaking out to the upside. Because of this, I do believe that traders are trying to get in front of the FOMC interest rate decision and press conference on Wednesday, as the market is betting on at least a 25 basis point interest rate cut, but there are some people out there that are willing to bet on the idea of the 50 basis points being the target. While I don't necessarily think that 50 basis points will happen, traders will be paying close attention to the press conference afterward.
Ultimately, this is a market that I think continues to be very noisy, but it certainly helps that the overall longer-term trend has been bullish. When I look at the MACD indicator, it is showing a bit of divergence at the moment, as momentum is not keeping up with price action, but that doesn't necessarily mean that we have to turn around and start falling. With this being the case, the market will be hanging on every word of Jerome Powell during the session on Wednesday, and after that we should have a bit more clarity.
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It's worth noting that the 5666 level is an area that has been resistance multiple times, and we find ourselves trying to break above there during the trading session on Tuesday, and if we can break above there, then we can really start to take off to the upside, perhaps entering more of a“buy-and-hold” scenario. Wall Street is essentially looking for that cheap money and Jerome Powell to step in and bail everybody out, as the overall economy has very little to do with what happens in the stock market and of course vice versa. However, if things get bad enough then people start to sell everything, they can to raise liquidity. I don't think we're there yet, but I do think we are going to get there sooner rather than later.
In the meantime, the market is likely to continue going higher, and you can make an argument that we are probably going to do everything we can to get to the 6000 level between now and the end of the year. The Federal Reserve will do everything it can to protect Wall Street.
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