The market reacted with a touch of weakness to the FOMC announcement in the late afternoon. More importantly though, the two indexes which lead the way up - Transports & Rus'2000, both closed with significant declines of 1.5 and 1.2% respectively. The Sp, Dow, and Nasdaq should (in theory) see similar falls within the next few days.
sp'60min4 - fib levels
So, the three main indexes only declined a minor 0.3-0.5%, but it is the move in the Trans and R2K that I think bears can justifiably focus on. The decline in the Tranny was the biggest since the mid November lows, so its kinda important.
The near term retracement - if that's what it is, will likely get stuck somewhere in the sp'1460/50s. The 1440s look out of range after this Friday.
The mid-term trend remains fiercely higher, and as the weekly chart shows, by next week, key rising-channel support will be in the sp'1450s.
If rising support holds - as I'm sure it will, then a further major wave higher to the sp'1520-50 level seems likely in Feb/early March, along with the big dow 14k level..and then quickly surpassing the Oct'2007 high of 14198.
Thursday will see the usual jobs data, but also Personal income/outlays, the Chicago PMI..and the Natural Gas report. That is plenty for Mr Market to use as an excuse to pick a direction and run with it, all the way into the close.
We could easily open a touch higher tomorrow, but regardless of the open, bears should be seeking a Thursday close <1495..preferably 1490. Anything in the 1480s by the end of this week would be good, and open up those 1460/50s for next week.
Goodnight from London