The Fed begins a two-day meeting today with a statement at 2pm EDT on Wednesday. It is uncertain -- as ever -- whether it will contain hawkish or dovish overtones. Perhaps a bit of volatility appears.
What matters to me -- as ever -- is the pattern of the S&P. This is what I think is going on: another wedge.
If wedges seem to predominate the analysis for the past year or so, it is true. In my opinion it shows just how tired many markets are, only to be continually "stimulated" into action. This only works until the addict collapses.
Like a good friend on the path of addiction, the higher the S&P goes, the more unrecognizable it becomes. Rather than attempt to fit the most recent pattern into an overall count, at this time it is best to keep it simple and just count what is identifiable. That's all this is.
That said, should the S&P get to "5" I would look to sell it hard. The cumulative advance/decline line (not just the intraday one that I chart) is starting to roll over on a daily and weekly basis. The 10-year is screaming that something is not right in the world of risk. And the VIX may have put in a bottom recently at 10.28.
Yes, I played BTFD once more yesterday but am already out. Today the S&P first needs to get above yesterday's high while staying above 1973.23. If it makes a new high in this manner, I may jump back in on a dip. My view of 1965.77 has changed and I'm back to 1955.59 as the more important stop level.