DPR Update – Wed, 24th May 2017

DPR Action:  Nothing to do

Today the banana skin was always going to be the release of the Fed minutes at 2pm.  The market chopped around until the news broke.

Earlier this year they had already indicated that they will be scaling back their massive $4.5 trillion balance sheet, however the market seemed to cheer the notes mentioned of moderating their balance-sheet reduction plan. It shows the Fed is being conservative in its approach to not shock the market.

So, where does it go now?  Well, at some point it is going to break higher in my opinion.  Its only a matter of time and will probably be higher by the close of the week unless news breaks the cycle.  The sell-off from last week was recovered very quickly and it is re-testing the 2400 level again in the S&P 500.   There is bound to be lots of stops above this level.  Squeezing stops sends the market higher as they have to unravel their positions.  That why we see big breakout bars in the market when it re-tests a previous high, and we may see one this week.  I think we will get to 2415 before the end of the week.  But, at the end of the day, it’s just a educated guess, the key is to follow price, not my opinions!

Bring on the bulls!

John