US stocks resume bullish momentum after yesterday's corrective pause

Having yesterday's retreat from record highs, major US equity indices opened neutral but quickly gained traction and moved into positive territory as investors continued to digest Wednesday's hawkish FOMC statement. On Wednesday, the US central bank raised its Federal-funds rate by 25 bps and projected three rate-hikes in 2017, which was more than two hike forecasted in September. 

The announcement sparked strong US Dollar rally across the board, which investors perceived might put some short-term pressure on equities. The concerns, however, seemed short-lived and US stocks resumed with their well-established bullish trajectory.

At the time of writing, the Dow Jones Industrial Average was up by over 30-points to 19,855, while the broader S&P 500 Index gained around 3-point and rose to 2,256. Meanwhile, tech-heavy Nasdaq Composite Index added 9-point and was quoting at 5,445.

Investor sentiment got an additional boost from upbeat US economic releases on Thursday. Today's US economic data showed weekly jobless claims falling by 4,000 to 254K and monthly CPI rising 0.2% in November. Adding to this, two regional manufacturing indices - Philly Fed and Empire State, printed surprisingly stronger-than-expected readings and pointed to optimistic corporate mood in wake of Donald Trump's surprise victory in the US presidential election.

Technical outlook

Carol Harmer, Founder at charmertradingacademy.com, notes, "unless we can make a break back towards the 2277 area the market will fail....we would be looking at the market coming lower for 2232 which is the first Fib retracement target....Here we cover all short positions...Look to re-instate shorts then on a break below here as 2216 would then be targeted...so we are a seller on strength....we would look to sell towards the highs...and keep stops then above 2287....because if we break this barrier the market will try for 2300...."