After the news of the 25bp rise from the Fed today, the market had a strong rally and broke above its downside channel. Tomorrow is a pivotal day. If we see follow through, this rally will continue to the 4500 region. But if tomorrow the SPX breaks back into the channel to the downside, it will likely continue to the bottom of the channel. Trade accordingly.
Comment:
Continuation of upward price action means the steep downward channel is broken. We are now approaching the 4500 region which is a key resistance area. Volume has been declining on this rally indicating that this rally does not have institutional backing. Short term traders can fade this rally with a stop above 4560 with a price target at 4300.