The ES has filled the gap from 907.75 to 914.00 that provided resistance yesterday and has edged above the 913.00 point of control as we write (high of 914.75).  The VIX has also tested the 26.81 support on this run up and a new low would be noted by many.  A failure at support would also be noted.

Longs will enter at 910.50 which, if rebounded from will be very bullish with a probability of new highs.  907.75 to 908.25 is also a Fib confluence long area.  Below 905.75, longs will be discouraged and we’ll have likely seen the high for the day.  Aggressive shorts can enter at 913.00 with a stop over 915.00; however, it may be wise to hold out for the 918.00 weekly pivot in confluence with a higher point of control and the highest 50% retracement at 918.75 from contract highs.  Above 921, and we could get a strong run into the volume gap that proceeds all the way to about 935.  Accordingly, above 921, we would not try to pick tops.

The Precise Take – Anemic response to FOMC Announcement—end of Q2 09 in sights

Yesterday saw the lowest point range in the cash S&P 500 (14.43) since the June 29, 2007 announcement that increased the Federal Funds target rate by 0.25 to 5.25.  Not coincidentally (at least as far as we believe), this was the last such rate increase prior to the easing that would eventually reach the current 0.00 to 0.25 range, and was not too far in time from the eventual October 11, 2007 all time high in the S&P 500.  The ES failed at the 907.75 gap area prior to the report and did not have enough momentum on the no-news Announcement to force any short covering.  Though the Fed did not accomplish much as equities were down and the yield curve spectrum was up, they were not materially changed.  It seems the Fed is in a position of…

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