Yesterday was a trading day of two halves. The morning pit session was slow and in a narrow range after gapping a few points above the prior day's high. It took great patience if you were long intra-day not to throw the towel in out of sheer frustration. The overnight high at 1969.00 was missed by a couple of ticks early in the day, and this was a key resistance area up to 1971.00 from swing highs prior to the big drop. As stated yesterday, it was a logical area for shorts but would also be a bear trap forcing big covering action if it broke through due to the significance of the levels.
After lunch buyers eventually drove into this resistance area, and after a brief consolidation aggressively pushed through the buy stops for shorts covering and breakout buyers. This took prices 10 points further hitting 1980.75 in the final few minutes.
Short term trends remain up and the weekly bar is trading back above it's 20 week moving average. This article from Brett Steenbarger shows the increase in market breadth on this move. A look at the weekly chart shows the measured breakout target at 2069.25 if this rally has legs:
For today, ahead of the Fed announcement, we've seen the Asian session stay in the upper distribution from yesterday. There is an initial upside level at 1991.75 being an CHVN and swing high from September. Above that, the all time high is back in play.
The 1971-1969 area is now potential support, with a prominent POC and VPOC at 1966.00/.25. Below that the gap at 1959.00 is yet to be filled. Disappointing news from the Fed could trigger a cascade of stops which have trailed behind pullback lows on the way up.