S&P 500 had trouble extending FOMC gains, and just when it looked that the 4,720 held as support, stocks were again rejected at 4,735, losing dozens of pts quickly – only to come back overnight. Well, the chief catalyst was ECB not meeting the Fed degree of dovishness in the least. Rotations continued just like I predicted yesterday in the morning – tech weakness was predictably there, and it was cyclicals and interest rate sensitive plays with Russell 2000 that drove the subsequent rebound.

For swing traders as well, this is a fair summary, but stocks may have to consolidate a bit longer than just a single day to get through 4,735 decisively. Disappointing Empire State manufacturing at -15 led to an initial bullish gap in ES that was however sold into, so better take off the intraday gains off the table (ES -5 pts, but more than made up with the NDX long bringing in 151 pts).

Credit Markets

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Bonds still have the risk-on posture, but I wouldn‘t rely on yields further declining to be a stock market driver higher like there is no tomorrow. Such an outcome needs half decent incoming data, which isn‘t what we got today.

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