What Do You Know? A Fed-Driven Rally

 | Jul 12, 2017 | 4:31 PM EDT
  • Comment
  • Print Print
  • Print
Stock quotes in this article:




We haven't had a Fed-driven rally in a while, but Janet Yellen made some dovish comments in her prepared remarks for Congress and it was like the days of old. The Nasdaq 100 ETF (QQQ) trended upward all day, the S&P 500 had some selling into the close and the Russell 2000 ETF (IWM) lagged all day, but breadth was stellar, with about 5,200 gainers to 1,550 decliners, and the mood was quite upbeat.

There have been several strong days like this in the past month, but in almost all cases the market reversed the next day and things have been pinned down in a trading range. Neither bulls nor bears have been able to generate momentum.

The bears have been hopeful that this choppy and indecisive action was signaling the long-anticipated top, but they have been unable to close the deal. The bearish narrative has been very clear recently and includes the inability of President Trump to pass fiscal reform and a more hawkish Fed. Yesterday, the market showed it wasn't too worried about Trump and today it showed that it isn't too concerned about the Fed.

The issue now is whether the bulls can build on this action for a change. Although volume was lackluster, technically the bulls are in good position here. The S&P 500 is ready for an assault on the all-time highs that occurred in June and it could lift the other indices as well if there is a breakout.

Yellen testifies before the Senate tomorrow and could have an impact again if she is asked the right questions, but the pattern of action has not favored another positive day. If that changes, there will be some short-covering as well as chasing by underinvested bulls, but don't be surprised if the trading-range action continues.

Have a good evening. I'll see you tomorrow.

Columnist Conversations

Spent a good amount of time with PayPal CEO Dan Schulman this week...and came away fully understanding why thi...
Has quietly taken a mini beating over the past few weeks. Might be worth a look on Monday given everything tha...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.