The Fed came out at 2pm today Wednesday to spook the markets. The Fed raised interest rates and expects to raise 3 times next year in 2017.
Biggest losers were Russell and Gold.
We basically had a B-wave fakeout to the upside in all indices and in silver and gold leading into the meeting. After the meeting, everything reversed.
S&P reached that 2244 i initially wanted on Monday, looks like we got it today. I thought the index would just run away without testing it, but looks like it found a way to get there 2 days later today.
After breaking out to all-time highs yesterday, we maintained above immediate support at 4900.
As nasty as the drop was in the Russell, the drop in Nasdaq has been fairly mild in comparison.
Silver failed at 17.3 – the key resistance region – that it was trying to test before the Fed meeting. Once the fed meeting hit, there was no chance.
While silver has found support in this region, it hasn’t bounced strongly off of it as I had expected. Still, the Fed announcement did not cause a pierce of support, yet. So it seems it will be stuck between 16.8 and 17.3 until one breaks.
Gold has been extending to the downside and again went down with the Fed news today.
I’m only just seeing just this 5 wave pattern – where the 4th wave a-b-c hit up against 1168 and just couldn’t break through.
I think it’s possible the 1140 might finally be the bottom for gold. Silver may have bottomed back during Thanksgiving when we suggested that possibility during Thanksgiving dinner. But gold has kept extending down.
Based on the char, the next support level was 1144. We went all the way down to 1140 and closed at 1144. It definitely feels like capitulation, but who knows whether it keeps extending. I do, however, finally see clear 5 waves in the hourly chart above. It has gone way further down than I had expected.
The below chart from last time’s post: Weekend, 12/10 100% and 200% Returns on SPY Calls
This was the rally into the weekend. We expected this to potentially go over 2260, which it did.
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