The Fed announced a pause in its rate-hiking campaign on Tuesday, but it turned out to be a nonevent for the market. The S&P 500 attempted to gap above resistance on Wednesday morning, but by midday, it was clear the attempt was doomed to failure. As of the close of Thursday, the S&P remains within the flag pattern which is bearish. This was a clear case of the news being fully priced into the market, and stocks are already looking beyond the Fed.

Oil and gold also attempted to rally in the wake of the Fed announcement, but like stocks, they have declined recently -- with gold declining more than $12 on Thursday. The U.S. dollar also rallied yesterday.
The mini sell-off in stocks, the decline in gold and oil, and the rally of the U.S. dollar is not exactly what you would have expected right after the Fed announced a pause in interest rate hikes. So it’s a good thing we don’t base our short-term outlook on what the Fed may or may not do. Right now, the market is wrestling with some very important decisions, and some sectors are making up their minds. When we take a look back at the entire rally from the bear market lows in 2002-2003, we see that the transports have just this month broken their trend from their March 2003 low. So far, the transports have tried to rally back above this trend line once, and they could still take another go at it in the coming weeks, but odds are there is a sizable decline directly ahead. If the transports cannot regain their composure and recover their bullish trend by month’s end, we’ll have a monthly close below the trend line and a clear sign from a key economically sensitive index that the current downtrend from the May high is more than a correction in an ongoing bull market: