Post FOMC Market Update

The most significant move that came out of the markets after the FOMC update was the continued weakness in equities in the face of oversold conditions and a lower dollar.

The US equity markets should be turning here.  They are oversold technically by many measures, and though they've had three up days now, given the dollar activity, the days should have been higher winners.

Either the dollar/general equity market correlation is breaking down, equities are foreshadowing a significant dollar rise, or this is a temporary situation.  A move below 1020 in the S&P, or if the next rally phase stalls before a new high (above 1102) is in place, then we should expect a larger correction and probably a breakdown in dollar/equity correlation.

The dollar continues to weaken and trade sideways, as we predicted last week.  Given that, we should see equities generally start to rise. 

Tomorrow, we'll provide a more detailed multi-market review and update.