Well, in retrospect, we can't be too surprised the Fed is standing pat on its earlier clues it would be raising interest later this year. Not that it firmly believes it should, but if Janet Yellen and her buddies were to dial back their enthusiasm now - after talking the economy up just a couple of months ago - it could really pull the rug out from underneath stocks. So, they're pretty much committed at this point. Just for the record though, the Fed meeting minutes maintained the "patient" language, which we interpret as meaning it's not going to force higher rates on the market if it needs to change the plan later in the year. For what it's worth, traders are saying a move isn't likely until October. That's when the Fed interest rate futures tip from predominantly a guess that the reserve rate will remain at 0.25% to a guess of 0.5%... though it's still a close margin for a rate increase in that timeframe. The commitment of futures traders says the odds favor a Federal reserve rate of 0.75% by January of next year, but again, that's a close race. This table from www.cmegroup.com (great site, by the way) illustrates how the market expects things to look a year from now. The FOMC rate hike wasn't the only economic-data wind blowing this week. We also got a pretty good batch of real estate data, and one on demand. Let's just take a quick look at them, one by one, in order of appearance. On Tuesday we heard durable orders fell 3.4% for December, versus an expected 0.5% increase. It's the fifth month in a row the total durable orders level fell, spurring some understandable alarm. As is so often the case though, the headlines and even the commentaries about the data failed to serve up the needed perspective. So, we'll do for you what they didn't... show you a picture of the long-term trend. Take a look. The top one is overall change in durable orders through December, and the lower one is the durable orders change not factoring in always-volatile transportation orders. The bottom one is the total spent on durable goods (everything, not seasonally adjusted). In this light... well, actually, there may be some cause for concern, though not for any reason other commentaries offered. It looks like the total durable goods "spend" uptrend is slowing down. And, we've now seen negative orders comparisons for five straight quarters, with or without transportation. It's also been a fairly important week on the real estate and construction front, with the Case-Shiller 20-City Index and the new homes sales tally both being released yesterday. The home price measure was a bit disappointing, as prices have now fallen for three straight months (as of November). The pace of purchases is picking up, with December's annualized pace of 481,000 new home purchases being the strongest number since 2008... when the figure was falling. We also got January's consumer confidence score from the Conference Board. As it turns out, Americans are feeling about as good as they've felt in years; the consumer confidence score of 102.9 is the highest we've seen since 2007. It's a figure that jibes with the preliminary readings of the Michigan Sentiment Index for this month. The third and final score isn't due until Friday, but as of the latest look, January's Michigan Sentiment Index score is on pace to be 98.2... also the highest level since 2007. Don't ask me what everyone is so excited about. Earnings growth is slowing down, things are downright pathetic overseas, and our stock market hasn't budged in over two months. All joking aside, that extreme level of confidence may well be a red flag of a fairly major top for the market. The tide tends to turn right when the masses seem to expect it the least. Back To the Brink of Big Trouble Isn't it amazing how quickly the tide can turn from "we might be alright" to "we're back to just hanging by a thread"? But, that's the way it went down today. While the pullback today might just look like a sizeable-but-manageable stumble, in reality, Wednesday's rollover is nothing to shrug off. We're going to put our focus back on the S&P 500 today, just because it best illustrates our key messages we need to pass along to you. As you'll see, the S&P 500 broke back under its 100-day moving average line (gray) today, and did so on higher volume. What's most interesting about the tumble isn't the break under the 100-day average line though. It's how and where it happened. The index tried to move above its 20-day (blue) and 50-day (purple) moving average line on Monday and Tuesday, but just couldn't get over the hump. Tired of too many failed breakouts already, it took very little for the bulls to throw in the towel this week. The bullish counterargument is, we just got an unusual dose of economic news today that doesn't cater to every whim of the average investor, and the knee-jerk response to the Fed's decision was a pessimistic one. And, as bad as today was, the S&P 500 is still above the crucial support level of 1971. I'd agree to both points. But, I'll just add (1) I've got a feeling the market was going to pull back no matter what the Fed said [traders were just waiting for a tangible excuse], and (2) even though the major line in the sand at 1971 is still intact, that's not the only line in the sand. It's been several days since we looked at a weekly chart of the S&P 500, but it became enormously relevant again today. Take a look. That long-term rising support line that's been in place since 2013 is now being pressured again. I honestly would have thought the upper edge of the rising trading range (currently a 2128) would have been tested before the next pullback unfurled, and maybe it will be before it's all said and done. But, here we are, just one bad day way from a pretty significant break under a support level at 2000. The VIX is back in the spotlight too, in the sense that it's once again putting pressure on a ceiling around 21.5. If the VIX cracks 21.5 at the same time the S&P 500 falls out of its long-term trading range, you might want to be very afraid. Fortunately for those of you who are also Elite Opportunity members, you've already got a position in some leveraged bearish ETFs, and have a nice profit cushion in place. We talked about that in a little more detail in yesterday's newsletter. Speaking of... Just So There's No Confusion As I was reading this afternoon's edition of the Elite Opportunity newsletter, John Monroe made a great point that - after having some time to think about it - I feel I need to clarify for you. We know we've been touting the EO's value as a short-term trading guide in several of the most recent editions of the end-of-day newsletter (the one you're reading now). But, in so doing, I think I may have sent a message that the Elite Opportunity service is just for short-term traders. It's not. It's as valuable to long-term investors as it is to short-term traders, as the EO crew considers all aspects in its market analysis.... not just the short run stuff. The approaches and tools obviously change depending on the type and timeframe of the analysis being done. It matters, because those of you who can get a grip on both the short-term and the long-term market trends are far likelier to get more out of the market. With that in mind, if you're not yet an Elite Opportunity subscriber, the only way to truly appreciate it is to see it for yourself. I suggest just signing up for one calendar quarter to see what it's all about. Here's how, or cut and paste this link: https://www.smallcapnetwork.com/pages/SCNEO/v1/