The Fed cuts interest rates 50 bp

The March NASDAQ 100 closed lower on Wednesday despite today’s 1/2% cut in interest rates by the Fed as it attempts to bolster the economy. Profit taking along with overriding fears of a possible economic recession led to the late-day sell off. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain bullish despite today’s poor performance signaling that sideways to higher prices are possible near-term. Closes above last Friday’s high crossing at 1873.50 are needed to confirm that a short-term low has been posted. If March renews this month’s decline, weekly support crossing at 1638.00 is the next downside target.

The March S&P 500 index posted a downside reversal on Wednesday as fears that housing sector troubles and related disturbances in financial markets will tip the U.S. economy into recession trumped today’s interest rate cut by the Federal Reserve Board. Despite today’s late sell off, March remains above the 10-day moving average crossing at 1344.51.  Today’s low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at 1382.61 are needed to confirm that a low has been posted. If March renews this month’s decline, monthly support crossing at 1229.20 is the next downside target.