Monday, March 15, 2010
Will $SPX Rally After FOMC?
FOMC Tuesday: The Fed has kept the language of its statements essentially unchanged for months. For example, the Fed has said over and over that:
*Inflation is likely to be "subdued for some time;"
* Economic conditions "are likely to warrant exceptionally low levels of federal funds rate for an extended period;"
* Economic activity has "picked up" or strengthened.
Historical Stock Market Fact: 76% of the time when the Fed has a meeting the stock market goes up.
The S&P 500 has climbed the wall of worry to the 1150, but has not broken through that level with any veracity. It can also be argued that the bears have done little to force the index back below the 1150 level. The SPDR S&P 500 ETF (SPY), rose for a 12th straight day on Monday, its best winning streak since 1995, according to Bloomberg. Yes the market is overbought, but it can stay overbought too. I believe that the $SPX momentum will continue as long as 1150 hold support.