5/25/23 Fed Indecision—Bottom Forming


Markets opened red and moved sideways throughout much of Wednesday’s trading session.

At 2 PM, the latest FOMC minutes dropped, and the market barely reacted…

The minutes showed what we’ve already heard from Fed officials—The Fed’s next move is not clear.

Image from AAL Magazine
  • Wording suggesting additional hikes are imminent was removed.
  • Inflation remains above the Fed’s target
  • The next rate decision will be made on June 14

In the final hour of trading, markets tried to rally. The S&P 500 and Nasdaq reach session highs at 3 PM.

But sellers stuffed the rally, and the indexes all closed red for a second day.

  • Dow Jones -0.8%
  • Nasdaq -0.6% 
  • S&P 500 -0.7%
  • Russell 2000 -1.2%

Sector Round Up

10 of 11 sectors end Wednesday in the red.

The lone winner, once again…

  • Energy (XLE) +0.4%

At the bottom…

  • Industrials (XLI) -1.3%
  • Finance (XLF) -1.3%
  • Real Estate (XLRE) -2.2%


Sometimes a straight line tells the whole story…

SPY Daily Candles – Chart by thinkorswim

Support held at the critical support level marked on the chart above.

This morning futures for the S&P 500 and Nasdaq and notably higher. A higher open doesn’t always bring an intraday rally…

We’ll be watching to see how the market closes.

A few data points to note…

  • The VIX bounced off of 20 on Wednesday after breaking through 18 on Tuesday
  • RSI levels are all neutral, the Dow is nearing oversold
  • The Put-to-Call Ratio is lightly oversold

Our take—the market is trying to form a local bottom.


June 1, the date the U.S. could begin defaulting on its obligations, is just 7 days away.

Before we get there, we have a holiday weekend to get through.

And another news drop this morning…

Initial GDP estimates for Q2 showed +1.1% annualized growth. At 8:30 this morning, the Bureau of Economic Statistics will release a revised estimate.

The market will be watching for hints of economic heating or cooling in the report.


*Low Float
^Open Position

*AMAM support at $14
*UIHC support at $6
TAST support at $5.50
ORMP support at $4
ALPN support at $10
NNOX support at $16, resistance at $20
ONCY support at $2
APLD support at $7
URBN support at $30
UPST support at $25
AZUL support at $8, resistance at $10

Secondary watchlist—float 100+ million

EVLV support at $5.50
OTLK support at $1.40
ACVA support at $17
XERS support at $2.80, resistance at $3
RIOT resistance at $12
MVIS support at $4
^IONQ support at $9
PLTR support at $11/$12

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