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12/15/2023 |

Market Update Into December 18th: Powell Saves The Day, Again!

As has been the case many times over the past two years, all eyes were on Jerome Powell and the FOMC announcement this week. If there was one takeaway from the meeting, one quote to drive it all home, it was this:

We believe that our policy rate is likely at or near its peak for this tightening cycle.’

The utterance of these words sent the markets sharply higher in an everything rally that pushed the all-powerful tech index within just 0.5% of its all-time high. Perhaps most notable, however, was the move in small caps which have certainly bore the brunt of this rising rate environment. Let’s dig into the charts and see where things closed!

Weekly Analysis

This week, the SPY ETF closed at $469.33 (+1.86%), lagging its counterparts in total return, but now less than 2.5% from its all-time high. The BBTrend indicator shows that momentum is declining while the price stalled at both the 20 and 50-period upper Bollinger Bands.

This is a weekly chart of the SPY index.

Closing less than 1% from its all-time high, the QQQ ETF ended the week at $405.34 (+3.36%). The price managed to close above the 20-period upper Bollinger Band but stalled just below the 50-period. 

This is a weekly chart of the QQQ index.

The IWM ETF put in a new 52-week high, closing at $197.04 (+5.48%). Momentum is increasing and this index is once again testing the top of the range it has been stuck in for over a year. Both 20 and 50-period upper Bollinger Bands are acting as resistance for now.

This is a weekly chart of the IWM index.