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January 11, 2022

Fed Plan In 2022 Released, Do This Now

Frank Cabibi

Fed Chairman, Jerome Powell, is giving his testimony today and has already mentioned a few things. One, that tapering is confirmed to end in March, and that interest rates will likely rise later this year. The Fed still plans to adjust their monetary policy throughout the year as the recent Omicron surge pans out and uncertainty lingers in investors minds.

The Chairman also stated that the recovery has been impressive thus far and the banking system in continuing to look stronger. We can likely see better earnings throughout the year to, and this could be a major driver for the market in value companies as well as growth.

Fed Plan To Raise Rates Has Market Higher

Fed Plan To Raise Rates Has Market Higher
SPX500 on 1D timeframe rejecting the lows from support on the rising trend line and pushing the 50 DMA. RSI reading is at 50.

COT data also suggests a move higher as interest is gaining across the board and futures contracts are being picked up. Retail is also trying to get in on the action as investors are now 99% long on the NAS100 tech stock index. The S&P and US30 are trailing NASDAQ's gains, but are up overall for the day.

Do This Now

On a technical scale, if price on the indices closes with the bullish hammer they have now, we could likely expect another test at the highs. That is about a 2% move for the SPX500 and a 5% move on the NAS100. It's tough to say how long this rally will last, and it could even dwindle by the end of today, but it will be important to watch price action on today's candles and see where we end up at the close. So, before you trade do a quick analysis on the charts to see whether or not you feel confident in the potential market moves later this week.

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