Dovish Fed bullish equity

Dow Jones Industrial Average futures climbed more than 200 points today in the reaction of dovish Fed announcement yesterday. The market interpreted that The Fed will cut interest-rate as soon as July this year. U.S dollar index turns sharply lower while the stock market moves higher.

Under the current situation, traders could hold long positions in shares and exit or scale out into next The Fed interest-rate decision.

Asian & European Stock market

Asian stock market continue higher today. Japan’s Nikkei up 128.99 points (+0.60%) to 21,462.86, China stock market up 69.32 (+2.38%) to 2,987.12, and Australia ASX 200 up 39.30 points (+0.59%) to 6,687.40. European stock market also turn higher. DAX Germany up 0.87%, UK FTSE up 0.39%, Euro STOXX600 up 0.64%.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA advance on the announcement that the Fed holds interest-rate and planned no rate-cut soon. It is a bullish situation for the equity market and technically the index could breakout above the channel. At the current time, staying long might be a good idea until the index loses its upward momentum.

Caterpillar Inc (CAT)

CAT made bullish correction toward the daily SMA 200. The share prices soon will test the averages and determine its next direction. We favor rejection from the averages and bearish continuation. But, it is possible for the share prices to climb above the averages and start a new bullish trend.

CTrip(CTRP)

CTRP manage to holdout above the daily SMA 200 and forming bottom near it. The share prices look to bounce from the averages and move higher. On the upside, $38.50 – $40.00 is the area to watch for possible rejection. Long positions could be taken near the daily SMA 200.