Roadmap for Impending Volatility
The highly anticipated rate cut finally occurred, but the market's reaction was muted for the major indices suggesting the positive news was already priced in.
As usual, the Fed's announcement triggered intraday volatility, sending the S&P 500 $S&P 500(.SPX)$ directly to our central weekly level of $6,555 before an immediate bounce. Similarly, the Nasdaq 100 $NASDAQ 100(NDX)$ found support exactly at the $23,975 zone, which was anticipated last Saturday as the line in the sand dividing bullish and bearish momentum.
Several key ETFs also bounced today with impressive accuracy and synchrony from their central weekly levels:
$SPDR S&P 500 ETF Trust(SPY)$ from $654
$Invesco QQQ(QQQ)$ from $583
$SPDR Dow Jones Industrial Average ETF Trust(DIA)$ from $458.4
$VanEck Semiconductor ETF(SMH)$ from $301.6
$SPDR Gold Shares(GLD)$ from $335 (as one of the levels on sight)
$iShares Russell 2000 ETF(IWM)$ from $238.2 (it briefly breached this level for a couple of minutes before bouncing)
That said, there is no confirmation of a pullback just yet, and staying disciplined is key to avoiding any premature decisions. It's worth noting that the $Cboe Volatility Index(VIX)$ retraced by 3% but it’s still above the key level mentioned last Saturday.
The major indices are still above their central weekly levels, as are half of the biggest mega-caps in the top 11 of the SPX. However, some securities, like $NVIDIA(NVDA)$ , lost their $174.9 level, as $Broadcom(AVGO)$ $356.6, which suggests caution for the semiconductor sector.
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