USDJPY and ES have retraced .886 of yesterday’s ramp.  Bulls need these levels to hold, as both are nearing channel support.

But, watch out for SPX’s SMA 100 down at 1766.89.  A new low there, and the ES to the larger scale .886 at 1764.55 could unravel things as stops are triggered.

continued for members…

The Dow, by having tagged its SMA100 and .886 without making a new low, is on much firmer ground technically speaking.

UPDATE:  12:05 PM

This would be a nice place for the wave 4 to fizzle out on SPX.  A 1.618 extension would take prices to the SMA100.

UPDATE:  1:35 PM

The Fed decision is due out in 25 minutes, and things are still a little tricky.  The eminis are showing a downside target of the white  .886 at 1764.55, also hinted at by the small H&S pattern.

USDJPY is about 1 point above completing a H&S Pattern of its own — call it 101.75ish.

If the market likes what it hears, these downside targets might not be touched.  It’s not necessary.  But, it would provide a more solid base for a strong rebound.  If it doesn’t like what it hears, these are the initial downside targets.

For USDJPY, the next ones are 99.95 and 98.46.  The H&S targets 98 or so — right in between the .786 and .886.

UPDATE:  2:25 PM

ES tagged the .886…

…but USDJPY (101.75) and SPX (1766.89) are still shy of their potential targets.  In other words, the downside probably isn’t over.

My best guess is that SPX will reach 1767 — perhaps at the close — and the market will soar tomorrow morning with the initial claims.  As we discussed earlier, though, 1767 isn’t as low as it could go.  Keep an eye on the USDJPY.

Stay tuned.