August 20, 2017

Typical sideways action ahead of Fed

After one of the most volatile trading weeks in recent past the S&P carved out a tight range today. This type of price action has been typical ahead of Fed meetings. Over the past year or so, the average intraday range has been roughly 0.5% from the previous day’s close. With that said we should expect to see more of this type of tight, range-bound action until the policy statement is issued at 2:15 on Wednesday. 

The market did attempt to rally into the afternoon hours today, but with fedspeak directly ahead conviction from the bulls just wasn’t there. This type of action, failed short-term rallies, often spells trouble for the market going-forward. It seems the false breakout that occurred on the 24th could hold up. I still expect to see oversold readings in the major indices before we see any type of conviction from the bulls. 

Oversold/Overbought levels for January 29, 2007

  • SPY – 40.4 (neutral)
  • DIA – 41.8 (neutral)
  • IWM – 62.3 (neutral)
  • QQQQ – 37.7 (neutral)
  • OIH -43.1 (neutral)
  • GLD – 60.1 (neutral)

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