General Market commentary

The S&P 500 index stalled a little bit near ATH as expected. The overall action is healthy. FOMC reaction is pretty bullish. Key take aways:

1. FED will keep its accomodative stance of monetary policy. This is THE key for mid to long term bullish thesis.
2. FED will keep the FED funds rate near 0 for the foreseeable future.
3. FED will continue QE by at least $80B/month for treasuries and $40B/month for MBS.
4. On conference, Powell addressed little concern on potential inflation, and quoted the long dated stagflation period.

Quantative market model signal

1. Midterm trend: moderately bullish
2. Midterm risk: neutral

Featured chart

NYFANG:SPX

The mighty FANG stocks have been lagging lately. The ratio of NYFANG:SPX broke out of an uptrending channel at the beginning of November. However these large caps are catching up now. Don’t get me wrong - AAPL/MSFT/AMZN/GOOG/FB/NFLX are still good, but I bet you won’t see those 5x-10x moves in the next few years. To outperform the market, you’d better to rotate your money to some hotter industries like solar I mentioned yesterday. But the risk is higher too.