The Fed Head's Q&A session today on Capital Hill went rather smoothly as Janet Yellen briefed the zombies on the Fed's plans moving forward. She seemed rather calm and well prepared for the grilling session and the market is responding with another trip past resistance.
Of course, this movie has played out like Groundhog Day with higher opens that have faded into the close all week but today's action feels more bullish as we believe there is a good chance the market holds resistance. Today's headline event with the Fed is now a tailwind and we mentioned that tomorrow's close will be more important than today's.
February has been super bullish following the beginning of the month dip and if the bulls can get through this week above resistance there is a good chance our fluff targets from December come into play.
Although historically bullish, March can also be a tricky month to trade as recent years have been very volatile. We believe the VIX could resume its wild price swings and as option traders it is exactly what we want to see. There will be plenty of opportunities to play index option trades on the major indexes if volatility returns.
We will cover more of our near-term outlook in this weekend's Weekly Wrap but for now all signs are pointing towards a continued rally.
As we make the turn, the Dow is higher by 35 points to 16,233 while the S&P 500 is advancing 4 points to 1,849. The Nasdaq is up 14 points to 4,306 and the Russell 2000 is gaining a point to 1,183. The S&P Volatility Index ($VIX, 14.17, down 0.18) has stayed below 15 and is edging lower.