Waiting on the Fed

There is no change in the short-term or medium-term trends for the S&P 500 ETF (SPY). The Fed meeting ends today with an announcement expected at 2:15 PM ET. We can expect some volatile swings just before and after the announcement with volatility subsiding around 3PM. It is possible that the direction established after 3PM holds for a few days. On the daily chart, SPY closed above 111 for three days in a row and has been up three of the last four days. However, post-open price action has been rather choppy. Notice that the last four candlesticks show little change from open to close and rather tight high-low ranges. In fact, Monday's percentage high-low range was the lowest of the year ((high - low)/close). Bollinger Band Width is also trading at its lowest level of the year. One could certainly call this a dull market. There is an old Wall Street adage: never short a dull market. Also consider that the medium-term and short-term trends are up and seasonality favors the bulls over the next 2-3 weeks.

On the 60-minute chart, SPY is meeting resistance in a familiar area (111-112). Three prior bounces failed in this area. With another gap up and surge above 111, we are currently witnessing the fourth attempt to break free. Despite resistance, there is a slight upward price bias since mid November. Within this slow rise, I am watching the gap breakout and the flag low for support. A move below 110.4 would break both and reverse the upswing within this trading range.