Bruce Marshall

Bruce Marshall

FOMC Announcement Wreaks Havoc on Markets

It’s Wednesday, April 12th, and Bruce Marshall of Simpler Trading is here to provide a nightly market update. With the release of the Consumer Price Index (CPI) and the Federal Open Market Committee (FOMC) minutes, the market has been in a wide range range-bound with intraday wild swings.

Overnight Session

The overnight session was very quiet, with the CPI being released in the morning. The opening bell saw a gap up, followed by a pullback. Marshall expected the market to consolidate and continue up higher, but instead it came apart. From top to bottom, the market saw a 65 point drop.

FOMC Minutes

The FOMC minutes were released during the day, and the Fed saw a lot of increasing danger and red flags in the banking sector that could slow down the economy more than expected. The Fed is hoping to contain this, but it’s going to take longer than expected. Marshall believes that we may still have a couple more years left of working this out, although it could change quickly and dramatically based on what happens in the economy.

Voodoo Lines

Marshall switched back to his normal Voodoo lines, which are based on Elliott Wave. The ES trades overnight, giving more accurate levels. On the one-year chart, the market has been above the fire line for quite some time. Marshall has been expecting the market to come up to 4200, and it’s been close a couple of times. However, he’s not sure if it will reach that level without some good news.

Upcoming Events

Tomorrow morning, the Producer Price Index (PPI) will be released, which could help the market go up or down. Starting Friday, the bank sector will kick off with JP Morgan, Wells Fargo, and Citigroup reporting their earnings. On Wednesday, May 3rd, there will be a Fed meeting. The following week, Google, Amazon, and Apple will all report their earnings on the same day.

Conclusion

It’s been a whack-a-mole market, and it’s hard to get a direction. Marshall advises to be careful when trading, and to limit risk and manage trades well. With a lot of news and events coming up over the next couple of weeks, clarity on the market may not come until after the Fed meeting in May.

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