The market was slightly extended short term
Monday's session saw the first forceps over the S & P 500's upper Bollinger Band (purple arrow) since today's rally began in late December 2018. In early February, the market approached the upper band and then took a very short break (blue arrow). Tuesday's session contained an intraday reversal that started from above the upper band (red arrow). Due to this writing, the larger image remains constructive.
Newer Breakout Holding So Far
Three weeks ago, S & P 500 (SPY) had just cleared 200-day moving averages (shown in red below) and approached heights made in 4th quarter 2018 (blue horizontal line ). The table below was first listed in a February 25 post entitled "Markets Hovering Near Important Guideposts".
The same chart during Tuesday's session (below) shows that S & P 500 is trying to hold over three relevant areas. The market seems to have tested 200 days earlier this month (A). The orange box (B) has so far done little to slow down the market's strong progress by 2018 low. On Friday, the market closed for the first time over the blue line (C) and nodded down the third consecutive closing of Q4 figures during Tuesday's session. The blue line sits at 2813; Tuesday's closeness was 2832. Wednesday's day was 2812 and changed.
In the diagram above, the longer S & P 500 (VOO) can hold above A, B and C, the easier it is to remain optimistic. It should be noted, though it is long-term bullish conditions, the S & P 500 may come back and retest the horizontal blue line that sits at 2813. A retest may happen in a few days or may come weeks / months later. Wednesday's Fed statement and press conference can launch some relevant information that affects breakout somehow.
This signal occurred only another time since 1950
This week's stock market video looks at an extremely rare combination setup for the S & P 500 that was last observed in 1991.
A break for hybrid / defensive assets
Mens The S & P 500 low-volatility ETF (SPLV) has worked well and still fluctuates near new heights, the conviction of owning more conservative S & P 500 shares has declined. If the S & P 500's breakage above 2813 holds (TBD), the relative demand for SPLV may be further reduced.
The same concepts apply to real estate investments (NYSEARCA: IYR). In isolation, IYR still keeps close to new heights, but signs of relative weakness are evident in the figure below.
Isolated, gold mine bearings (GDX) remain in an appearance relative to the low achieved in 2018. However, the relative trend has not new high since late December.
The topic "Lower conviction to own defense activity" transfers to bonds (TLT) vs. stocks (SPY) diagram shown below.
Fed's Shifting Rate Forecast
Fed's poor interest rate forecast delivered on Wednesday could provide bonds, revenues and weak dollar assets with a half wind, telling us they are open to a shift on SPLV: SPY, IYR: SPY, GDX: SPY and TLT: SPY charts. The stock market's latest short-term expanded state and reaction to Wednesday's Fed meeting pauses to see how things go near 2813 on S&P 500.
Enlightenment: I am / we are long GDX, SPLV, SPY. I wrote this article myself, and it expresses my own opinions. I do not receive compensation for that. I have no business relationship with a company whose stock is mentioned in this article.