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Dec 16th, 2009: EOD Charts

Posted by pugsma on December 16, 2009

The implusive sell-off down to 1108 after the intial thrust higher post FOMC announcement did not surprise me.  Looking at the 1-min chart, this can be interperted as the c-leg of wave ii of wave (3) pull-back off the wave i of (3) peak today at 1116.  In order for this most bullish count to hold up 1105 must not be taken out tomorrow.

There is an expanded flat option on the table (see purple labels) for wave (2) pull-back that could take the SP-500 all the way down to near 1100 to test the open gap from 1096.  I really don’t give this a high probability of playing out, but I thought that I should mention it should the selling continue in the morning tomorrow.

Typically the first move after the FOMC is the correct move for the near term.  In this case the SP-500 went up from to 1113 to 1115 on the announcement, then sold off.  Sometimes the rebound and follow-through in the direction of the first move is delayed and happens the following day.  Thursday price action is very key now.

I don’t really have a bearish count going right now, but if the 1096 to1100 area falls tomorrow then I will start to concider them more seriously.

Overall the FOMC announcement was positive news for the markets in the intermdiate term, as the Fed signalled they will keep interest rates near 0% as the economny is allowed to continue to strengthen further.

1-min Chart:

5-min Chart:

60-min Chart:

Daily Chart:

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