Market Remains on Shaky Technical Ground After Fed Day

 | Mar 21, 2018 | 4:31 PM EDT
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The market had a difficult time making up its mind about Wednesday's FOMC interest-rate decision and policy statement and that is because it wasn't clearly hawkish or dovish.

In the short term the Fed made it clear it isn't very worried about inflation and is in no rush to raise rates. It is likely there will not be four hikes this year as was feared by some. However, the central bank did indicate that it is likely to start increasing rates more aggressively in 2019-20.

The Fed is setting the stage for a rising rate environment for a number of years and as long as the economy remains robust and inflation contained, it probably won't upset the market much. Stocks tend to run into problems when the market's view of the economy differs from that of the Fed's but that isn't the case at this point.

As I discussed this morning, the main problem for the market right now is technical. The S&P 500 is holding support but it is precarious, as is the Nasdaq's. We had some oil leadership today, which helped, but big-cap technology names such as Apple (AAPL) and Facebook (FB) are struggling.

While breadth was good and small-caps performed, the number of strong setups is declining.

The indices closed near the lows of the day and are now facing talk about tariffs on China and the budget bill that still isn't passed.

Support is holding but if that is tested the chances it will crack are quite high.

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

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