This week the US stock index S & P 500 has created this annual bottom. We will see, where this week closes and it’s very crucial to further market development. Today’s (19.12.2018, Wednesday) will discuss the Fed about interest rates.
US President Donald Trump harshly criticizes the Fed for raising interest rates and highlights a possible response to further increases. The Fed plans to continue raising interest rates. They are currently up to 2.25 percent and the market expects confirmation of this trend (interest rates grow will continue). In the current market turmoil, markets would not have to respond the best, as rising rates increase US dollar values and worsen investment opportunities (whether in banks) and so the stocks could reach negative levels. Of course, there are several factors. Fed said earlier that the economy is evolving well, and so the upgrading may end sooner. Let’s see, let’s wait for today’s verdict.
Now we could look at the chart. The market responds very sensitively to these reports and even if the Fed should raise interest rates anything can happen. In any case, there will be important to watch weekly candle close. Also, a monthly and annual candle is also important. Therefore, December is an important month and we can expect to continue with increased volatility.
The market came under the EMA 100 from a weekly point of view, and if it would have closed down below, that would not be good sign. The fundamentals would have the power to reverse, but also to strengthen. The chart shows another strong zone, where the market could be reached after a possible breakout. But there is only the middle of the week and we have to wait for the weekly candle close. Below the highlighted band are other strong supports (volume supports and EMA 200).
It should be remembered that the market is still in the orange area and the situation may turn. You must therefore wait for confirmation. RSI is at low levels without turnover. Similarly, MACD continues to decline, and the Histogram is still weak. So far, the situation does not look the best, but as I say, today’s reports can reverse the situation. The market is still trades near the important supports, so anything can happen.
This analysis serves as educational content and cannot be considered as investment advice. When trading, we recommend keeping strict money and risk management.