All Eyes on Fed Today

Today's Fed meeting is likely to set the tone for the rest of the year. All eyes will be scanning the Fed release for language indicating that rate hikes are near completion. Specifically the market has been expecting the word "measured" to be deleted from the report. This has been the word used by the Fed over past months that has been interpreted as hawkish on rate hikes by most analysts. As we approach the meeting today charts are set up for a run into the end of the year. The NASDAQ and S&P 500 are both trading with strong bull flags and are showing good divergences all around. A break up from these flags will be a buy signal and those who have remained doggedly short are essentially going to have no choice but to flip to the long side propelling prices even higher. The Fed report may or may not impact this set up. We just have to wait and see what they put out and how the market interprets it. Gold is most likely going to feel the most impact from the Fed today. If hawkish language is removed then we should see gold shares continue their rally. If not, then the sector weakness we have witnessed over the past couple of days will likely turn into something worse. Today is a really good day to stay sidelined waiting for the market to react to the Fed. If the broad market turns higher here we will have many new advantages so it makes sense to wait a day rather than try and force something to happen in front of the meeting.