“It’s been a rollercoaster of a couple of days for the Dow Jones, with the index falling over 300 points, or 2%, on Friday before staging an impressive 200 point rally yesterday. Volatility has been extremely low and Friday’s fall-off low looked like we were finally going to get some direction in the market.
“However, despite a fairly negative start in Europe yesterday, as the US opened, the bulls returned to the market and global markets began to recoup their losses. What initially looked like a normal retrace after a large fall from the previous trading session turned into a storming rally.
“This was sparked by Federal Reserve speakers who intimated that the chances of raising interest rates at next week’s FOMC meeting were unlikely. After these comments, the market has priced in only a 15% probability of a rate hike next week. This uncertainty from the Federal Reserve is likely to cause some choppy markets for the next week, but it’s unlikely we’ll see a prominent trend forming in either direction until the decision next week.”