As mentioned in last week's commentary the 199.88 level acted as resistance and capped Thursday run up.
Friday's session was dominated by the sellers as the market indices closed near the lows of the day however after all was said and done we remain near where we began at the start of the week.
The pattern of fading the initial market reaction to an FOMC announcement continues to be a worthwhile tactic. #study
All of the major levels we outlined the past few weeks have held so the following scenario is still in play.
We see 2 possible scenarios of which I believe the 1st scenario is more likely:
1. If the SPY can hold the ~189 level then the expectation is that we see the market work its way higher.
Interestingly we now find ourselves retesting the triangle. If the can hold then this favors a continued run to the upside assuming we can break the 199.88 level.
We now have an unfilled gap @ 199.73 which is an attractive target.
My mid-term target continues to be the unfilled gap way up @ 208.32 which would result in a re-test of the symmetrical triangle.
2. Else if we fill the gap @ 192.85 , break the then expect to see the ~189 levels.
If the ~189 level fails to hold then we can expect to find ourselves back at the lows of 182.40 with the following downside targets -
Unfilled gap @ 177.48
Unfilled gap @ 173.22