As expected yesterday, the Fed left rates alone following a series of economic data points indicating a soft landing ahead (but with a deteriorating housing market).
The real story of the day has been the resiliency of this market. A sales warning from Yahoo! (NASDAQ:YHOO) and a Thai coup couldn't derail the market yesterday. While initially "selling the news" following the Fed announcement, traders stepped in near the close to propel the market to near intraday highs. In fact, trading volume rose to levels above Tuesday's indicating the big fellas putting some more money to work. Bullish action indeed.
Looks like traders are continuing to cheer plummeting crude prices and strong earnings. case in point: yesterday oil plunged again, briefly slipping below support around 60/barrel after the energy department reported a larger than expected build in weekly distillate supplies to their highest levels since January 99. In the earnings arena, Oracle (NASDAQ:ORCL) made headlines with its blowout numbers which provided another catalyst for the continued flow of cash out of commodities and into tech.
I would expect the Dow to touch all time highs today and the S&P to clear multi year highs on an intraday basis. However, the key as always, is how the market finishes. If we can get a surge tomorrow and hold above these highs, we could be in for a big time end of year rally. We shall see.
DJIA long-view chart:
S&P 500 long-view chart: