Ambrose Evans-Pritchard penned excellent article this evening for the The Telegraph (US inflation rears its ugly head as global cycle nears danger zone) which has stated that with "so much fog in the air" in the U.S. with job creation, the Phillips Curve trade off between unemployment and inflation, and the labour market reaching NAIRU (non-accelerating inflation rate of unemployment) that it will not raise rates this week. However, Central Bank policy in the past has traditionally raised rates when "calibrating policy" and the output gap, so where does this leave us in the market? It's something that is being hotly debated and the ambiguity is palpable on both sides of the fence in this debate.
Looking at a couple of charts this evening in key sectors a reassuring picture is not being painted of where the market may be headed and the Federal Reserve announcement tomorrow might be a catalyst. The Small Cap ETF IWM has put in a bearish ascending triangle which broke today. Still in a large downward channel key indicators like MACD and TRIX are crossing over bearishly.