 Hello and welcome to CMC Markets weekly outlook video. My name is Colin Czenski chief market strategist The eyes of March or March the 15th has the potential to be a really active day for trading Particularly in the US market For the US it's the day of the Fed meeting and the Fed is expected to raise interest rates once again We've had a lot of signals that unless things really went off the rails that the Fed would be considering raising interest rates again Since then that those comments made by Fed chair Yellen We had a an absolutely spectacular ADP jobs report and we now have the markets pretty much thinking that the Fed said to raise rates Again in March. Why is this significant because in 2015 and 2016 the Fed only raised rates once per year There are this will be their first increase of 2017 coming on the December 2016 rate increase and suggests It could be setting up for raising rates once a quarter this year as they tend what they seem to want to move gradually The the interesting thing though is that the Fed it said they were looking at raising rates three times this year If they do go in March it gives them more options in in previous years They had found them so we had seen the Fed had been stalling installing throughout the year particularly in 2016 where they held off because of Brexit they held off because of the US election Then they got to December and all of a sudden found they had backed them painted themselves into a corner So it looks as though the Fed is trying to give themselves some more flexibility this time around The looking at this what's intriguing is that if we look at how the Fed funds rate is as pricing in future rate hikes We have a 98 percent increase percent chance that the streets pricing in of a increase in March But look at this almost a 50 percent increase of a second hike in June and over a 25 percent percentage chance of a Third rate hike in September and almost 20% of a fourth rate hike in December So the street does seem to be coming around to the idea that the Fed could raise rates fairly consistently going forward at this point in the cycle It's important to remember that as long as we're running below 2% Which is the Fed's inflation target that we're still looking at really the Fed taking their foot off the gas More than within the Fed actually putting their their foot on the brakes still what it does suggest is a lot of the really really super easy Money out there and really cheap money that's been fueling the stock market gains may continue to be unwound Over the course of this year and that could have an impact on trading One of the things traders will be looking at from the Fed meeting is to see whether or not the Fed is sinking Three or four rate hikes this year Are they gonna planning on going once a quarter or are they leaving themselves some wiggle room to miss a quarter? if needed the U.S. Dead limit deal expires on March the 15th as well and in the past That's led to a lot of stress and a lot of tension and in within the U.S. Government has even led to U.S. Government shutdowns Previous shutdowns have have forced the Fed to delay actions before so it's possible Also, we could be seeing a move in March with the Fed trying to give themselves some flexibility To skip later on if they need to if something happens over the over the budget Also important with the budget this week is on the 16th of March The president Trump is expected to bring out their first budget traders have built in huge Expectations that he'll be able to do all these things that he's promised in the in in fairly short order very efficiently And with minimal disruption with the budget we're gonna start to find out where are the priorities? Where are the details? What are the numbers? What is he looking to spend on first? What's going to get cut and what could get delayed for example? There's been a lot of talk of a push-up for military spending at the expense of spending on other departments particularly the environment the Possibility of will they focus more on health care reform relative to tax reform? If they go with reforming Obamacare first when does tax reform happen and what's the nature of that? What happens with with border taxes? What happens with potentially could happen with infrastructure spending is that going to start this year? Is that going to get pushed off to next year? So once we actually get some real numbers and details on the table and for Congress to start discussing and Implementing and funding then we start to have another round Potentially of the streets sorting out who could be the winners and losers in the near term relative to the longer term under President Trump Looking at US markets so far the we are seeing the US dollar continuing to climb heading into the Fed meeting people are anticipating an interest rate increase we've seen that the The US dollar index bottomed out right at the beginning of February. It's been trending upward It's recently broke out 102 to complete an ascending triangle But hasn't been able to make too much headway yet at this point. It looks as though the street is pricing in For interest rate hikes for 2017 So we'll see what happens where we may also see some significant trading action is in US stocks They've been screaming upward since the US election this low near 17 17,500 was was on election night and the recent peak was up near 21,150 That's just a massive massive rally what we do see here the one the RSI is it's getting very overbought for a second time We're seeing a bit of either a double top or a negative divergence either way that upward momentum could be peaking for now And we've seen that the RSI rollback under 70 telling us that a correction could be starting What we're going to be looking for in the coming days is is 20,800 a break of this would break the read the the downtrend that's been in play or sorry The uptrend that's been in place since election night So watch out for that as we move through the course of this week if that holds We stay in the uptrend if that breaks then the the next support is probably close to this about 2580 and here we have the 50-day moving average in a 23% Fibonacci retracement of the rally Jim is gonna fix that a little bit there of the rally in and around 20,280 so that's a another key technical point for the US market So it looks as though this week we could see quite a bit of activity in US trading