SPX Consolidation

The S&P 500 continues to consolidate in the 1360 to 1390 range. With the FOMC rate cut announcement coming up next Wednesday (estimated at a .25%), the index may decide to continue trading in this range until the announcement.

Unlike the high anticipation of some of the last announcements, I get the feeling that this one just doesn't matter as much as the past 5 or 6 did. The feverish buildup of what they're going to cut seems absent from this one so far. The streets seems to be pricing in a .25% and we'll just have to wait and see how the announcement affects the market.

From a pure technical standpoint, The SPX is still in an intermediate downward trend with a short term upward trend still in progress.

The price is currently below the intermediate downtrend and above the short term up trend. As long as the price stays within that range my stance will remain neutral.

Should the SPX break to the upside, I would look for 1406 (horizontal resistance) and 1417 (fib resistance) to be very strong resistance areas. To confirm a bullish bias I would need to see the SPX cross above, retest and create another higher high and higher low above the 1406 area.

The SPX closed today with a doji at the 38.2% fib level so still lots of indecision.

AMZN, AAPL and SBUX all reported after hours today and despite mixed reports and guidance, they ALL traded lower in after hours trading. We'll have to watch futures tomorrow morning to see if the hangover lingers our if the street gets some more good news to counter the bad.

I have hedged my SPY Iron Condor positions with some SPX Butterflies in case we continue the short term uptrend, but I am also fishing for a cheap price on some SPX Put Butterfiles with 1300 guts to hedge my bottom IC positions in case the downtrend continues.

In summary, I am neutral with a slightly bullish short term bias based on the higher highs and higher lows I see on the daily chart. However, I also see resistance dead ahead at those 1406 and 1416 levels so I wouldn't be surprised if we saw some bull/bear fighting in those areas that might lead to some more consolidation instead of outright bulltardness.

Bulltard (bool-tard') n. 1. Trader or investor who buys and buys and buys and buys... driving equities, commodities and other instrument prices to unsustainable price levels.

SPX Daily Chart: Note: Since November of 2007, the SPX has never spent more then 9 days ABOVE the 30MA without needed to retest it. As of today (Wednesday) it has been above it 8 days. We are either going to equal the record of 9 tomorrow or fall back down to retest it again.