All eyes were on the Federal Reserve statement today as many were looking for the word “patient” to be removed. Ahead of the statement the market sold off and as the statement neared sellers took control. Traders were certainly fearful of what the Federal Reserve had to say. Just prior to the statement buyers did step up ahead of the release and continued to buy after the release. It turns out the Federal Reserve was not about to move rates in April and left a small chance it could occur in June. A solid sign was the Russell 2000 hitting another all-time high on big volume. S&P 500 and NASDAQ are nearing their respective highs, but have yet to confirm. The big volume on the session certainly is a positive for this market to continue to make new highs. Today’s session was a big day and one that certainly puts us back to seeing new highs on the horizon.
At this point it will be nice for one of the bigger indexes to confirm the Russell 2000 new high. At the same time to avoid getting overheated too quickly some digestion would go a long ways as well. As long as we continue to see healthy action in our portfolio and buy signals this market should continue to push higher. We know nothing is guaranteed and it is precisely why we cut our losses. Your exit strategy is just as important where you buy and how much you buy. Do not forget where you cut your losses. Live to fight another day.
Perhaps something many will be mentioning as a sidebar was the move in the dollar index today. It was widely accepted amongst the trading community the Federal Reserve would open the door to a rate hike. Thus, creating a situation where the dollar would become MUCH stronger and there were many looking for this outcome. As of now, the Dollar Index is well off its high set on the 13th of March. As the dollar has come off its high commodities have pushed off their lows. Gasoline, Cotton, and Crude Oil futures are leading the charge higher. The CRB index is still down 7.8% on the year and is down 5.3% for the month of March. While this move does appear to be a short-term bottom commodities are not out of the woods just yet.
Overall this market remains in position to continue to march towards new highs. The Dow Jones Industrial Average is above 18,000 and small cap stocks are at new all-time highs. We will continue to prosper with this market environment as we stay disciplined with our strategy. All the noise the media pumps out, we simply ignore.
