U.S. markets were weak throughout Wednesday's session as traders awaited the latest FOMC minutes while looking into any language that could signal a shift in current policy.
There wasn't anything surprising in the report that showed considerable debate over the policy stance, though nothing really to suggest they would not tighten again in December.
The major indexes made an attempt to rally into positive territory after the news but President Trump's comments that he'll cut spending, and that China is not ready for trade talks, may have dulled enthusiasm.
Volatility was slightly elevated but held key resistance levels.
The Russell 2000 fell 0.5% after testing an intraday low of 1,571. Fresh support at 1,575-1,570 was breached but held into the closing bell.
The Dow declined 0.4% following backtest to 25,479. Near-term support at 25,600-25,400 was split with both levels also holding into the close.
The S&P 500 slipped less than a point, or 0.03% after trading down to 2,781 shortly after the open.
Support at 2,800-2,875 held with a close below 2,870 and the 200-day moving average being a bearish signal.
The Nasdaq dipped 3 points, or 0.04%, following the backtest to 7,563. Support at 7,600-7,550 held with a move below 7,525-7,500 and the 200-day moving average being a warning sign for lower lows.
Financials led sector strength after soaring 1%.
Health Care and Consumer Staples rose 0.4%
Consumer Discretionary paced sector laggards after giving back 0.8%.
Industrials and Materials were off 0.7%.
Global Economy - European markets showed weakness as faltering negotiations between the European Union and the U.K. over a trade deal to exit from the trade bloc continued.
France's CAC 40 and Germany's DAX 30 fell 0.5% while the Stoxx 600 Europe declined 0.4%. UK's FTSE 100 and the Belgium20 dipped 0.1%.
EU September new car registrations fell 23.5% year-over-year to 1.091 million but year-to-date are up 2.5% to 11,951,957.
Asian markets were higher across the board with Hong Kong's Hang Seng closed for a holiday.
Japan's Nikkei rallied 1.3% and Australia's S&P/ASX 200 jumped 1.2%. South Korea's Kospi soared 1.1% while China's Shanghai advanced 0.6%.
China September new yuan loans increase by 1.380 trillion yuan, topping expectations of 1.359 trillion yuan.
September aggregate financing increased by 2.210 trillion yuan, topping forecasts of 1.554 trillion yuan.
UK September CPI rose 0.1% month-over-month and 2.4% year-over-year, missing estimates of 0.3% and 2.6%, respectively.
September core CPI rose 1.9% year-over-year, below expectations of 2%.
The UK August house price index rose 3.2% year-over-year, topping forecasts of 2.8%.
MBA Mortgage Applications Index sank 7.1%, along with a 5.9% drop in the purchase index and a 9% plunge in the refinancing index for the week ending October 12th.
The average 30-year fixed mortgage rate rose 5 basis points to 5.10%, and represents the highest level since February 2011.
Housing Starts fell 5.3% to 1.201 million in September, a larger than expected decline to 1.272 million. September building permits slipped 0.6% to 1.241 million.
September single family starts slipped 0.9% to 871,000 while multifamily starts dropped 15.2% to 330,000. Starts rose 29% in the Northeast and 6.6% in the West, while declining 14% in the Midwest and 13.7% in the South.
Atlanta Fed's Q3 GDPNow estimate was trimmed to 3.9% from 4% previously, but still above the 3.3% Blue Chip consensus.
The FOMC Meeting Minutes showed all officials supported a gradual approach to tightening.
Almost all favored removing the accommodative phrase from the policy statement, while a number judged that it would be necessary to temporarily raise the federal fund rate above their assessments of its longer-run level.
A few Committee members expected policy would have to become modestly restrictive for a time.
Also, a couple of officials indicated they would not favor adopting a restrictive policy stance in the absence of clear signal of an overheating economy and rising inflation.
As indicated by the Fed chairman, estimates of the level of the neutral federal funds rate would be only one among many factors that the Committee would consider in making its policy decisions.
On the economy, trade policy was seen disrupting business investment plans.
Market Sentiment - The iShares 20+ Year Treasury Bond ETF (TLT) traded in a tight range for the 4th-straight session following Wednesday's backtest to $113.98.
Support at $114.25-$113.75 was split with a close below $113.50 being be a bearish development. Lowered resistance remains at $114.50-$115.
Market Analysis - The Russell 2000 ETF (IWM) had its 3-session win streak snapped following the pullback to $155.88. Near-term support at $156-$155.50 held.
A close below $155 would signal additional weakness with risk towards $154-$152
Resistance is at $158-$158.50.
Continued closes above the latter would confirm a near-term bottom with upside towards $160-$160.50 and the 200-day moving average.
RSI is back in a slight downtrend with support at 35-30.
A move below the latter would signal additional weakness with risk to 25-20 and recent lows. Resistance is at 40.
The Health Care Select Sector Spider (XLV) was up for the 2nd-straight session after tapping a high of $93.64.
Near-term resistance at $93.50-$94 held on the 2nd-straight close above the 50-day moving average.
Continued closes above the latter would be a bullish development for a run towards $94-$96 and fresh all-time highs.
Current support is at $92.50-$92. A close below $91 would signal additional weakness and another possible short-term top.
RSI is in an uptrend with resistance at 55-60.
Continued closes above the latter would be a bullish development. Support is at 50-45 with a move below the latter signaling additional weakness.
VIX aka FEAR index declining.
Liquidated NFLX bull put at a healthy profit.
Expect more upside to develop over the next few sessions.
Don't want to jump in with both feet till I get better sense of direction and % of stocks trading above the 50 day line begins to jump higher.
We have enough time on majority of positions to see significant decline in value.
- will update you tomorrow as usual.