The FOMC statement did not have the desired effect for the market today as it was rather flat for the bulls and the bears. While the FED was positive overall about the economy and that rates were likely to lift in the future, it did not have the hawkish impact that some had hoped for. Inflation was also expected to be in line with expectations, but not explosive by any means. The other major news of course was the Trump state of the union, which saw little real economic substance as well at this current stage. So for USD bulls it could be some time off until the USD is king again, but for now we have some progress from the FED that they’re looking to lift rates which will help – but short term bearish sentiment could remain quite strong to say the least.

The most interesting effects so far have been on equity markets as they’ve slid down the charts over the last two days. The S&P 500 had briefly pushed above resistance at 2875, but has failed to hold up in the current market climate. One of the major reasons so far has been the disappointment in the state of the union speech, which Trump had alluded to being one that will bring about economic prosperity. Markets were disappointed as infrastructure had been one of the main priorities, but so far that has not come to fruition like many had expected.

The end result has been some serious profit taking for the S&P 500 and one of the longest bull streaks in history finally snapping. Key areas the bears and bulls will be targeting will be of course the 20 day moving average as the market slips lower, and I would expect this to act as dynamic support and the strongest level. Potential other strong targets of support can also be found at 2825, 2806 and 2775 as well, but the 20 day moving average would be the key focus for most bears. On the upside if the bulls continue, resistance can be found at 2850 and 2875 on the current charts.

One other key area that will be of interest to traders with the recent falls will be of course gold which is a hedge against large falls. Recently gold has profited off the back of a weaker USD, and the most recent bearish activity seems to have been and gone after a strong bounce off the 20 day moving average.

Support levels can be found at the 20 day moving average and 1336 in the current market we are seeing. Resistance levels can be found quite easily up the chart at 1349, 1357 and 1366 at present. If we do see further equity uncertainty then gold is likely to become a major player in the market in the short term.