Are Falling Stocks Ahead Of Today's Fed Meeting A New Trend?

www.investing.com/analysis/are-falling-stocks-ahead-of-todays-fed-meeting-a-new-trend-200611682

By Sunshine Profits (Paul Rejczak) | Dec 15, 2021 10:07AM ET

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Stocks went lower yesterday, as investors took profits off the table ahead of today’s FOMC release. Was it a reversal or just a correction?

The S&P 500 index lost 0.75% Tuesday, as it broke below its recent trading range. The broad stock market’s gauge retraced some of its rally and it got back below the 4,650 level. On the previous Friday, the index fell to the local low of 4,495.12 and it was 5.24% below the Nov. 22 record high of 4,743.83. Then, we saw another attempt at getting back to the all-time high and on Friday the index closed the highest in history.

So was yesterday’s decline only a correction?

For now, it looks like a downward correction, but we may see some more volatility following today’s FOMC release and tomorrow’s European Central Bank and the Band of England release. Today, the index is expected to open virtually flat and it will likely trade within a consolidation before the Fed release at 2 p.m.

The nearest important resistance level is now at 4,665-4,670, marked by the recent local lows and the next resistance level is at 4,700. On the other hand, the support level is at 4,610-4,630, marked by the previous Tuesday’s daily gap up of 4,612.60-4,631.97. The support level is also at 4,600. The S&P 500 is close to the early November local low, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):

S&P 500 Daily Chart.

Tech Stocks Are Relatively Weaker

Let’s take a look at the Nasdaq 100 chart. The technology index bounced to the resistance level of 16,400. Tech stocks remain relatively weaker, as the Nasdaq 100 is closer to the early December local lows.

NASDAQ 100 Daily Chart.

Conclusion

The S&P 500 index will likely trade within an intraday consolidation before the Fed release today. Then we may see an increased volatility in stocks, currencies and commodities. The S&P 500 index trades within a downward correction and we may see more profit-taking action in the near term.

Here’s the breakdown:

The S&P 500 is expected to open virtually flat ahead of today’s FOMC release.

We are maintaining our short position from the 4,678 level.

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Central Banks

Interest Rates

Next Meeting

FED

4.50%

Mar 19, 2025

ECB

2.65%

Apr 17, 2025

BOE

4.50%

Mar 20, 2025

SNB

0.50%

Mar 20, 2025

RBA

4.10%

Apr 01, 2025

BOC

3.00%

Mar 12, 2025

RBNZ

3.75%

Apr 09, 2025

BOJ

0.50%

Mar 19, 2025

CBR

21.00%

Mar 21, 2025

RBI

6.25%

Mar 10, 2025

PBOC

3.10%

BCB

13.25%

Mar 19, 2025

US 30	42,625.0	-176.5	-0.41%
US 500	5,742.1	-28.1	-0.49%
Dow Jones	42,801.72	+222.64	+0.52%
S&P 500	5,770.20	+31.68	+0.55%
Nasdaq	18,196.22	+126.97	+0.70%
S&P 500 VIX	23.37	-1.50	-6.03%
Dollar Index	103.782	-0.030	-0.03%

Crude Oil WTI	66.70	-0.34	-0.51%
Brent Oil	70.04	-0.32	-0.45%
Natural Gas	4.653	+0.254	+5.77%
Gold	2,918.30	+4.20	+0.14%
Silver	32.920	+0.111	+0.34%
Copper	4.6907	-0.0193	-0.41%
US Soybeans	1,020.25	-4.75	-0.46%

U.S. 10Y	4.293	-0.025	-0.58%
U.S. 30Y	4.589	-0.028	-0.61%
U.S. 5Y	4.072	-0.022	-0.54%
U.S. 3M	4.343	+0.036	+0.84%
US 10Y T-Note	110.78	+0.23	+0.21%
Euro Bund	127.32	-0.34	-0.27%
10-2 Yield Spread	31.32	+4.15	+15.27%

Apple	239.07	+3.74	+1.59%
NVIDIA	112.69	+2.12	+1.92%
Alphabet A	173.86	+1.51	+0.88%
Tesla	262.67	-0.78	-0.30%
Amazon.com	199.25	-1.45	-0.72%
Netflix	891.11	-15.25	-1.68%
Meta Platforms	625.66	-2.27	-0.36%

Are Falling Stocks Ahead Of Today's Fed Meeting A New Trend?

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