11:48 am EDT:  After rallying a bit on the open, the ES sold off one tick short of closing VWAP and just found support around combined session daily S2 at 1136.75.  This should hold until at least 1:00 pm, when the Housing Index report could move the markets again.  ~1141 is now a sell zone unless the report comes out much more bullish than expected.   It looks like scenario #2 from the morning report is unfolding, where we get a double top pattern on the FOMC Announcement tomorrow, with the ES going sideways to down into early next week before attempting to head higher.   As of today, this is still pretty speculative and we’ll have a better idea if this plays out by close tomorrow.

The Precise Take – Markets quiet ahead of full news week

Leaders Analysis:  After breaking its consolidating wedge to the downside Friday, the US Dollar Index is retracing a bit as expected.  The EuroYen is down marginally, and 30 Year T-Bond yields are down, but at support.  For today, the leaders are equities neutral.

Medium Term Analysis:  Tomorrow, the FOMC meets and is the first one day meeting in recent memory.  This in itself shows the Fed is a bit complacent; however, the ramifications aren’t relevant to trading over the next week.  We don’t expect any waves, and with CPI Thursday and options expiration (quadruple witching) later this week, there will be plenty of news to influence equities.  Given the bullish FOMC seasonality from the close of the day prior (today) to just after the announcement, the best scenario for swing longs is to trade above 1147.00 by tomorrow’s open and clear major resistance at 1152.75 prior to or just after the announcement.  Then, after consolidating Wednesday…

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