Fed's on Tap. AMZN Is on Watch

Big ranges are likely today.

Technical Edge — 

• NYSE Breadth: 85% Upside Volume

• Advance/Decline: 78% Advance

• VIX: ~$21.50

A few weeks ago, the market was “certain” that the Fed would raise rates by 50 basis points at the current meeting. That’s after Chairman Powell’s decisively hawkish testimony, where he laid the groundwork for a larger-than-expected rate hike and and higher rates for longer than expected. 

Then the regional banking crisis happened. 

Now the market expects a softer approach from the Fed, which includes a rate hike of just 25 basis points. That’s probably the smart move. 

“No hike” could give the markets a sugar-high rally, but ultimately says to the market that the banking crisis is more severe than we think. A 50 bps hike creates worries about more stress on bank balance sheets. 

25 basis points allows the Fed to save face without causing too much worry. It’s the press conference at 2:30 we have to look out for…

S&P 500 — ES 

• Downside levels: 4020, 4009 (last week’s high), 3975-80 & 3948-58.

• Upside Levels: 4045-50, 4067.50, 4082, 4100, 4130. 

SPY