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SPX and ES both closed below their SMA10s yesterday — the first time that’s happened in 2018.  Although futures rebounded strongly overnight, the current gain of 9 points is only enough to prompt a backtest on the open for SPX.

Today should be interesting as we have not only the FOMC rate decision/statement, but pending home sales and EIA inventories.  I’m still looking for overshoots from our currency pairs and DXY, oil and gas are tumbling, and VIX is nearing our next upside target.  All in all, it should be an interesting day.continued for members…

If we get a decent reversal at the SMA10, we could finally see SPX tag the bottom of the rising white channel at 2808.16 and, if that fails, the white midline and SMA20 at 2788.10.In the last few minutes, ES  climbed back above its SMA10, which will put SPX slightly above its SMA10 and white midline — primarily on a sudden decline in VIX, now off nearly 6% and at the purple .618 and white .886 support levels.CL, which has reached our initial downside target, seems somewhat likely to reach the purple channel backtest at 60ish.

While RB is back inside its channel and has potential to the next downside target at 1.75ish.UPDATE:  12:45 PM

I have no idea what the FOMC is going to announce today.  But, in a perfect (charting) world, the following would happen.

TNX: reverses at 28.56
ZN: reverses at 121
DXY: reverses between 87.259 – 87.46
EURUSD: reverses at 1.2597
USDJPY: either reverses at 108.161 (secondary 106.50) or simply spikes higher
ES: plunges to either 2810, 2800 or 2773
SPX: plunges to either 2808 or 2788
VIX: spikes up and reverses at 16.13-16.29
GC: spikes up to 1377-1380
RB: plunges to 1.82 or 1.76
CL:  drops to 63.39 or 60-61

Could those forecasts all play out?  The charts suggest they could.  Many of these are fairly small moves compared to the big moves we’ve already seen play out — meaning the reversal might have already taken place.  Ultimately, they all tie back into to interest rates and inflation as discussed a few days ago.  I’ll be watching for even a hint of dovishness — after which, of course, we’d get full frontal dovishness by the BoJ.

Stay tuned.

UPDATE:  3:00 PM

The complete FOMC statement, along with key changes:

Information received since the Federal Open Market Committee met in December indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate. Gains in employment, household spending, and business fixed investment have been solid, and the unemployment rate has stayed low. On a 12-month basis, both overall inflation and inflation for items other than food and energy have continued to run below 2 percent. Market-based measures of inflation compensation have increased in recent months but remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.

Dec 13 statement: Market-based measures of inflation compensation remain low;

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will remain strong. Inflation on a 12‑month basis is expected to move up this year and to stabilize around the Committee’s 2 percent objective over the medium term.

Dec 13 statement: Inflation on a 12‑month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee’s 2 percent objective over the medium term.

Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.

In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1-1/4 to 1‑1/2 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

Voting for the FOMC monetary policy action were Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Thomas I. Barkin; Raphael W. Bostic; Lael Brainard; Loretta J. Mester; Jerome H. Powell; Randal K. Quarles; and John C. Williams.

The market’s reaction: