Market Will Push Higher Once the FOMC Cloud Passes

Posted 9:30 AM ET - The market has been able to tread water after making a new all-time high last week. Earnings season is in high gear and buyers are back. The FOMC statement will be released today and once this cloud passes the rally will resume. Mega cap tech stocks will report during the next week. Google posted a good number and that was already priced into the stock. It pulled back yesterday and it weighed on the tech sector. Facebook announces after the close today and Amazon reports after the close tomorrow. We will hear from Apple next week. This is the busiest day of earnings season. The Fed will start reducing its balance sheet in September and they will hint at a December rate hike. This news is factored into the market and it should not dampen spirits for more than a day or two. Republicans were able to get the healthcare bill passed and that is lifting the market. Both parties will start the negotiation process and DC has taken a tiny step in the right direction. Tax reform is all the market cares about and this moves the timetable forward. Swing traders should be long QQQ calls. Stop the trade out if the QQQ closes below $143.50. As the market moves higher, raise the stop. I'm not going to mention bullish put spreads any longer. They should have maxed out and you should have taken profits. Once this QQQ trade runs its course stay sidelined and wait for signs of weakness. This has been a very nice run and we want to cash in. Day traders should look for opportunities to get long early in the day. After the first two hours the activity will stall and we will be "dead till the Fed." The greatest risk today is getting long and having your stocks move against you. You will be forced to hold during the FOMC statement (very risky) or to take losses. Try to catch a few longs early and set modest targets. After the FOMC statement wait for 15 minutes and follow the momentum. Once the direction is established we typically see follow-through. The backdrop this morning is bullish. Oil and financials are higher and tech looks strong. Once the FOMC dust settles I am expecting a final push higher that could last until the middle of August. . .

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