Fed FOMC Fuel Fizzles

As was reported in the prior post, CNBC thought the bulls had been thrown a bone in the FOMC statement today, where the wordage in the statement eliminated the near certainty of further rate hikes (see comments in prior post if interested). One would have thought that - if the comments were perceived as overtly bullish - then prices would have at least popped to fill its prior gap lower, if not make an outright higher high. The market participants had different ideas and not only was a new daily high not made, but the gap wasn't even able to be filled. In fact, on the SPY 30-min chart below, prices got no higher than the 62% retrace level before turning lower again.

SPY Cash ETF - 30 min - Lower Low

Prices today traded in the short-term channel shown in a complex wave with local higher highs. A total of three up (green) fractals, and two down (red) fractals were formed in the channel on this time scale. Based on yesterday's end-of-day analysis of a likely 'five-up', we said higher wave peaks could occur. They did. Toward the end of the press conference prices broke the channel lower and then proceed to bust both of the down (red) fractals lower. So, short-term, the market has made lower highs and lower lows.

As long as this continues prices then would be down trending. Let's see if impulsive behavior to the downside can continue to break the 403 level prior low in the SPY cash and begin to form a motive wave lower. Barring that, the alternate is some kind of flat wave or a triangle at this or a slightly lower level.

Have an excellent start to the evening.

TraderJoe