S&P Continues to Bounce Off Strong Support

Before I get started with the good stuff I would like to apologize for the late post. This the first, maybe second time that I have had ISP issues and hopefully it will be the last. I know many of you look forward to reading my daily post so again I apologize.

The move today before the Fed announcement is somewhat of a rarity. Typically, the market will trade in a tight sideways fashion with volume tapering off as the day moves closer to the Fed announcement. Obviously, this did  not occur today which caught a few surprise, howver, it for the most part a no harm no foul type of move because the S&P bounced off of what has been a very strong level of support at 141.

The market is just finished its sixth day trading a tight range-bound environment. As I stated yesterday, in most cases, the longer we remain trading in this tight sideways mode the sharper the move outside the range. Also, Fed announcement days sometimes give a false breakout and while we did not get the typical breakout the market did bounce substantially off the 141 level. The day after the announcement is where we usually see volatility move back into the market. Couple this with the upcoming options and the seasonally bearish Monday folloiwing options expiration and I think we could be in for a wild ride over the next three trading sessions.

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Kindest regards,

Andrew Crowder

Chief Options Strategist

Crowder Investment Research, LLC