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Stocks recovered majority of losses after news that the Fed is shifting to a “wait and see” mode after December meeting   

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Stocks were reeling early in NY after Chinese tech giant, Huawei’s CFO was arrested sparking concerns it could derail the trade progress that was made over the weekend.   The Dow was down 780 points and turned negative for 2018 but managed to finish the day only lower by 79.4 points.   The dollar also recovered some of its losses against the Japanese yen after falling to a fresh monthly low.

The rebound in risk appetite also benefited from the Wall Street Journal report that “Federal Reserve officials are considering whether to signal a new wait-and-see mentality after a likely interest-rate increase at their meeting in December, which could slow down the pace of rate increases next year.”

Price action saw the Dow form a triple bottom pattern at around the 24,250 level.  Price is now facing key resistance from the 200-day SMA, which currently trades at the 25,113 level.  If bearish momentum returns and the triple bottom pattern is invalidated, we could see a run towards the 23,500 region.  To the upside, 26,300 remains major resistance.

 

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023.

His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.

Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.

Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.

Ed holds a BA in Economics from Rutgers University.
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