Equities extended their rally on Thursday with the S&P 500 moving up about 1.0% at the high of the day. While the near-term trend is up there is still risk in the market so investors should beware. On a technical basis, the S&P 500 is still within a downtrending channel that has dominated prices for the last several months. So long as the index is inside this channel any rebound in equity prices should be viewed as a selling opportunity.

Aside from earnings, the next big hurdle for the market will be the FOMC meeting next Wednesday. The meeting is the day before the June PCE data and will be a trying time for the Fed governors. As it is, it looks like the committee is on track for a 100 basis point interest hike at the July meeting but they may hesitate in favor of the data. The risk for the market is twofold, on the one hand, the FOMC could unleash a large interest rate hike on the economy while on the other, inflation may continue to run rampant.