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S&P500 Breaks Falling Resistance after Yellen's Dovish Speech

Janet Yellen gave a dovish speech in Chicago today, saying that there the “Fed’s job is not done”. She noted that the Fed is very short of its mandates of maximum employment under stable inflation. She focused on the unemployment situation, highlighting the slack in the job market (more qualified workers available than there are job openings for them). A long period of this condition is forcing many out of the labor force, and has been limiting to any wage growth.

The speech may be prompting the market to push out its expectation of a Fed rate hike. This could be a positive for risk-appetite as the central bank would keep loose monetary policy longer.

We saw a rally in the S&P 500 corresponding to Yellen's speech. The index broke above a falling trendline that came down from the 1883.5 high. A break of that opens up the 1888 2014, and record high. 

(S&P500 1H chart, 3/31)

The market is basically sideways, with a prevailing bullish bias. However, traders might remain tentative ahead of Friday's NFP. In fact, the breakout rally we just saw is stalling as I make this post. If the market can not push above 1888 after Friday's NFP, then we really should consider the market neutral, with a possible bearish development.