Happy Halloween Everyone... Today I'd normally say the expected light volume would all the market to float higher but with the reopening of the case on Hillary for treason with those emails and with the uncertainty about what the Fed's say at this Wednesdays' FOMC meeting, I'm thinking the market will chop around or drift lower. The small fear there is usually enough to keep traders on the sidelines and not get too excited about going long until such events pass. Plus we are still stuck in the lower middle of a range and I'm sure there will be more interesting in buying with a retest of the 2100 level then the current level.
However, we did a new FP on the SPY afterhours on Friday so at some point I do see them rallying up to that level. Will that be before the FOMC meeting or after? I'm not sure but I don't see some short squeeze up to that print starting today. The charts are mixed but overall still bearish. I we can get another move down today into the close then we should be oversold enough to bounce back up on Tuesday and at least start the move up to the FP on the SPY. I'd like to see 2100 tested but that's not required. Just another down day today would probably do it, but I'd like to get close to the 2112.50 low that happened over the weekend, not just some one or two point red close.
If for some strange reason we close green today then I don't think the charts will be oversold enough to produce that starting rally to the FP, but instead just push off the down move until Tuesday. We've been making higher lows since the 2100 low with a 2107 low on the 13th and over the weekend we hit 2112, so we don't have to break that before the FOMC meeting but we should at minimum get close to it again. They might be too afraid to let the market fall to retest 2100 now as they fear it will not hold. So making higher lows is all they can do for now so they can get this short squeeze started tomorrow and into Wednesday/Thursday. I'm not sure on where we bottom at if we drop today, but I do think it's needed before going higher again.
My thoughts are this, we'll drift lower through the day. The noon time period we could see a turn as traders go to lunch, but I see nothing here in the charts or the news to spark a rally today. If we can close down 5,6,7 points or more, making a higher low (or lower low) on the futures today then I think we'll be oversold enough to start at least the first wave up tomorrow. I do see one more squeeze up coming but I don't see it starting today. Maybe it starts tomorrow or after the FOMC meeting? I'm not sure yet. I only think that I'm a bear today but not a super excited one as it feels more like it's going to just do a "slow drift" down instead of a cliff dive. It might even chop around until noon first and then drift lower? It's just not a clear setup for today, but more bearish then bullish.
