What Fed Inaction May Signify For The Economy

In the first half of trading, U.S. stocks gained
traction after a non-eventful morning
as investors are hesitant to jump in ahead
of the Federal Reserve’s afternoon decision on interest rates and its take on
the health of the economy. The central bank is expected to leave rates
unchanged. This inaction on interest rates could be a sign that the economy is
holding its own.

The major indexes were edging higher at the mid
point, with the Dow
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trying to break
above its resistance at 8736 it has been in the green for the first half of
trade.

The
S&P 500
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is close to breaking through a recovery high
at around 911.62. If we can get through this level look to the 918 through 921
resistance levels. A pull back today could land us down to a support level to
907 to 902.

The Nasdaq
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is trading in
the positive zone after hitting an intraday high at 1325. If the Nasdaq can
break through this level, look for overhead resistance at 1340. Support levels
are at around 1282 on the daily chart.

Some of the sectors that are helping push the
markets are: Semiconductors
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, Storage, Telecom
Equipment
, Banks
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, Brokerage
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,
Retail

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, Airline
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Oil Services
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and Beverage.

The lagging sectors are: Integrated oil,
Drugs, Rail, Biotech, Advertising, Aerospace and Utilities

Apria Healthcare
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is pulling back
from its recent high.
AHG carries a

3
-month
relative strength rank of 92
from TradingMarkets.com

UCBH Holdings
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is making a
60-day high with double the normal volume. UCBH has a

TradingMarkets.com RS3 rating of 89
.
We could see UCBH pullback to test
its support at UCBH at 40.70.

Doral
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is breaking out above
its resistance line (40) with unusually high volume. Doral is pulling back from
the high. A possible trigger could be if Doral pulls back to the 40 support
line.

Icos Corp
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is breaking out of a
cup-and-handle with increasing volume. Icos has a

TradingMarkets.com RS3 rating of 98
and an up trending

ADX
of 32. Icos looks to be pulling back from the high. A possible
trigger will be if ICOS tests the 24.50 support. I

Guidant
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is forming a cup and handle pattern on the daily chart. GDT has a

TradingMarkets.com RS3 rating of 96
and an up trending

ADX
of 32.

NYSE Breadth

Adv: 1568 UpVol: 33925897

Dec: 1536 DnVol: 26610010

Net: +32 Net: +7315887

NASDAQ Breadth

Adv: 1436 UpVol: 3647807

Dec: 1640 DnVol: 2722614

Net: -204 Net: +925193