Yesterdays big reversal after the FOMC meeting wasn't expected by many as we all know that most Fed days close green. I suggested a possible C wave up that could reach as high as 40 points over the 2260 area open, but I also pointed out that other stocks had recently had failed patterns... meaning don't get too bullish. That was just a lucky call I guess as bulls hit resistance from the pink falling trendline and stopped their rally up about 15 points or so from the open. Then, if there was going to be anymore of a squeeze higher the FOMC meeting was the catalyst to make it happen... but it failed, and failed big reversing back down over 30 points from the high that day.
So, what do we have going on today? Well, my guess would be a pattern similar to the sell off on 3/21 that saw a 2-3 day bounce. It took the futures back up from about 2332 to 2356 or so, then dropped again, rallied one more time and dropped again deeper from the 24th to the 27th. I don't expect it to play out exactly like that as it rarely ever repeats any previous pattern perfectly. But a small rally today should happen. The yellow rising trendline that was support is now resistance on this move back up and as long as it holds the bulls back I think another drop will follow by Friday or Monday. This rally up might end today and only last one day compared to the 2-3 days for the previous time. But it's certainly setup a series of 1 down, 2 up wave patterns that will at some point end up with a wave 3 down inside a C down... and that one should last several days in a row and be double or more the drop yesterday and/or the drop on 3/21.
Anyway, let's see if today some kind of choppy rally gets going and look to the end of the day to short it should it get back up to that yellow rising trendline into the close today. I don't know if the drop after this rally will be the start of that bigger wave down or just a pullback briefly before another run back up later on Friday but we'll cross that river when it gets here. If it happens then I'd label the move up today as some small degree "A up", then the move down tomorrow around the open as the "B down" and finally the "C up" into the close on Friday. The move up should not take out the rising yellow trendline but worst case if it does the final line in the sand for the bears would be the falling pink trendline. Since SkyNet loves to trap both bulls and bears I would not be surprised if the bigger move down doesn't happen until next week. So be prepared for today and tomorrow to be choppy to the upside with fake out down moves that don't break yesterday's low.