The 6-pt ramp we’ve seen overnight has left the eminis right at a point of resistance with respect to two .786 Fibonacci levels, a trend/channel line off the Mar 27 and May 1 highs, and an RSI trend line.

UPDATE: 10 AM

The overnight ramp fizzled almost from the opening bell.  On a basketball court, someone would have yelled “get that weak $#@% out of here!”

Nothing has changed since yesterday afternoon.  This morning’s better than expected ADP survey was appropriately greeted with a yawn.  ADP has consistently been at odds with the Fed’s NFP data — to the point where someone finally graphed what we all know.

There is still just as good an upside case as downside, depending on whether the Fed decides to make the market’s day or not.  My best guess is still “not” but I have no inside info or special powers of discernment.  I continue to believe that they’ll whip out the QE when they have to, and not a minute sooner.

At <1300, with the market about to break some key technical levels and the euro going down the tubes, it was a different story.  120 points later and “positive” housing, employment, PMI data to chew on, it’s just not worth it — especially when you consider that it’s their last, best tool to goose the markets.

If the market should react very badly to today’s news, it again opens the door.  Here’s a few charts to chew on:

continued…

 

UPDATE:  2:20 PM

Not much to report on the Fed statement… no QE3, continued twist, no change in rates, will continue to monitor…blah, blah, blah.  Market initially sells off, then decides this what everyone expected anyway.  Non-event.

UPDATE:  EOD

Pretty much a non-event as far as FOMC announcement days ago.  The flag continues, but at a potentially steeper decline.  The lack of a sell-off in the fact of no QE should be net bullish, but I think the market pretty much saw this one coming.

The ECB gets their turn tomorrow.  Will it be more of the same?

We reached our target of the mid-1370s [The Waiting Game], but I lowered my stops to 1382 rather than cover my short position (1387 on July 30.)

Today’s chart does a great job of showing how channels can evolve.  The flag (which was once a toss-up between a flag and a pennant) was behaving itself until after the Fed announcement, at which point it dipped about 4 points.

The white channel promptly broke down.  Interestingly, though, the drop was just enough to establish a lower bound that was exactly parallel to a redrawn upper bound; i.e. a channel — shown here in red.

 

For day traders, the tag of a new lower bound was a good signal to cover shorts and play the rebound.  I’m holding short, however, as I expect general disappointment with the ECB’s announcement much like we saw with the Fed’s.   Watch the video live at 14:30 CET here.

I’m still short at 1387 from July 30, but will likely switch sides if we break convincingly out of the channel.  The upper bound appears to be about 1382.50 tomorrow morning, but I don’t want to get blown out by market makers running the stops.  I’ll watch this level carefully and evaluate my short position if/when the time comes.