Markets are slightly higher today on low volumes, as traders are positioning for tomorrow’s FOMC release. Stocks opened near breakeven this morning, but buyers stepped in and have since pushed indexes back near all-time highs. Tech stocks are leading the market today, as the Nasdaq is about 0.7% higher on the session. The Russell 2000 lags slightly, up about 0.5%, while the Dow and S&P 500 are each about 0.3% higher. Bonds are higher with stocks, as lower yields have led to a 0.6% rally in fixed-income securities. Gold and silver are trading near breakeven on the session, but miners are higher by about 1.5%.
CHART OF THE DAY
JPMorgan Chase (JPM) – The financial conglomerate has been fairly strong this year, but JPM has since entered a period of downwardly-biased choppy action. The shares were guided higher by their 50-day moving average since late last year, but have since given up that trendline. Going forward, this could be a good point to trade against. In addition to this, sentiment is near a bullish extreme, both in the options market and among analysts. Continued weakness by the shares could spark sentiment-related headwinds going forward.
I like a bearish entry here with a stop on a close above 54.50. I would initially target a move down to 50, with 46 as a stretch target.
WHAT I’M EXPECTING
I’m stating the obvious here, but am looking for some serious volatility over the next two days. Tomorrow’s FOMC release and press briefing should spark some fireworks, and then Thursday is loaded with economic data. Be prepared for any outcome on the release of this information.