April 7, 2021
By Mish Schneider
Written by Forrest
The FOMC Minutes report released Wednesday stated little to no change.
Rates will stay low until 2023 and the monthly $120-Billion bond buying program will stay in place.
The Fed has been hesitant to change any fiscal policy as it has been very attentive to the economic recovery.
However, this has worried some investors that believe hefty spending will increase inflation.
Currently, the inflation rate is set to rise to around 2% by the end of 2021.
For Jerome Powell, Chairman of the Federal Reserve, this number is acceptable as supporting the economy and maintaining a positive forecast for the unemployment rate is still the focus.
With that said, the overall market reaction was lackluster, but upon a closer review we do see some signs of stress.
The small cap index Russell 2000 (IWM) closed under its 50-Day moving average, which it recently cleared at $221.
The 50-DMA has been the best support for IWM to hold from a technical standpoint. Now, we will wait a second day for confirmation to see what IWM does.
Semiconductor’s sector (SMH) has also struggled to clear resistance at $158 along with the transportation sector (IYT) showing some drifting price action.
Because IYT helps to show the demand side of the economy, this holds great importance as we look for the market to continue upwards.
Thursday, we should watch for IYT to show some more decisive price action and for IWM to either confirm a cautionary phase with a second close under its 50-DMA or rally back over that major moving average.
S&P 500 (SPY) Holding near highs.
Russell 2000 (IWM) Watching for confirmation of cautionary phase with second close under the 50-DMA at 221.57.
Dow (DIA) 329.72 support.
Nasdaq (QQQ) 338.19 high to clear. Support 321.40
KRE (Regional Banks) Support 64.31
SMH (Semiconductors) 258.59 resistance.
IYT (Transportation) Watch to hold 260.
IBB (Biotechnology) 145 support.
XRT (Retail) 88.56 support the 10-DMA
Volatility Index (VXX) Needs to find support.
Junk Bonds (JNK) support 108.57.
LQD (iShs iBoxx $Inv Gd Cor Bd ETF) Holding over the 10-DMA.
IYR (Real Estate) 92.47 support area.
XLU (Utilities) 64.19 support.
GLD (Gold Trust) 164.15 Needs to clear.
SLV (Silver) 23.02 support the 200-DMA.
VBK (Small Cap Growth ETF) 282.22 resistance area.
UGA (US Gas Fund) 30.73 support area.
TLT (iShares 20+ Year Treasuries) 134.97 support. 138.66 resistance.
USD (Dollar) 92.36 the 200-DMA
MJ (Alternative Harvest ETF) 21.55 next support.
WEAT (Teucrium Wheat Fund) Needs to get back over 6 and hold at this point.
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