So the busy day has concluded with the FED and I have gotta say, I did not see anything that leads me to believe that rates will be on the rise any time soon. The Fed made two noticeable changes to their statement, they took out unemployment remains elevated and they said that odds of inflation remaining persistently below 2% has "somewhat diminished". Of course we did have one dissenter out of the FED, Charles Plosser, who feels rates rising sooner should be more up for a debate. Bottom line is that they made it clear that monetary policy will remain highly accommodative and rates will remain low for some time. The stock market came well off of its lows for the day rallying 100 points before fading a bit into the close. Here is an hourly chart of the Dow Jones
The 10 Year Note rose 10 basis points today and settled at 2.55%. The jump in rates for the bond market was from the strong and surprising 4% GDP number for the US. All the dollar gains were pretty much from the GDP as well, after the FED statement the Dollar did give back some of its earlier gains and failed to close above the 8150 resistance. Take a look at the price action in the Dollar below
Closed at 8149, now we have to see how traders digest what they got from the FED today and the 4% GDP growth. Yes that is a strong headline number and you can build a case that no other major economy other China is coming close to this type of growth especially not Europe, UK, or Japan. Based on that alone, it is compelling to buy the US Dollar, almost sounds too easy and trading these markets is anything but easy my friends. The US debt plays a very large part in the value of its currency so don't go running with the headlines here. Be careful and watch to see what the big money will do. Tomorrow may be slow as we will have the US unemployment number released Friday morning so be patient. A strong number on Friday can have huge implications on where markets are headed in the near future and a weaker number will calm the markets from worrying about any rates rising any time soon.
Last thing I want to talk about is OIL. OIL broke below $100 this afternoon and does not look very good at the moment. I have been saying that falling prices are a sign of a weak economy or weak demand, we have chaos all over the Libya, Russia and the Middle East. If equities keep falling, who knows how low OIL can go. Watch the $99 level now to see what happens.
Here is a look at the OIL market at the close of Wednesday's trade