Stock futures are flat ahead of the Fed FOMC meeting

Yesterday CPI data brought upward pressure to the stock market. However, traders stay cautious ahead of the Fed FOMC meeting today. Will the Fed surprise the market and push the stock market lower again? Alternatively, will it fuel the bullish sentiment by showing a dovish outlook? It is better to stay sideline and await the release of the interest rate and the market reactions before jumping into any positions. We think there is a chance of further bullish continuation as inflation data shows a downward trend.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index gapped up after better-than-expected CPI data. However, the index also relinquish part of its gain and settled not far from the previous closing level. Traders will monitor closely today’s FOMC meeting and the reactions after it. If the index continues moving lower then we might see another test on the trendline and daily SMA 200. Failure to bounce from the support level could open the path for a new bearish trend.

Baidu Inc (BIDU)

BIDU share prices are in a bearish trend and currently make a bullish correction. The bullish correction reached the daily SMA 200 and will test it. If there is a bearish rejection from the level then traders could consider entering short positions. However, if the share prices could climb and close above the daily SMA 200 then there is a chance of bullish continuation and long-term trend change.