The S&P complied with last evening's update by staging a recovery back to the 1250 area this morning.  Traders, however, didn't waste much time selling the rally. As we await the Fed announcement, my undivided focus is on the 60-min chart below.  1251 marks the area of the weekly pivot (W-PP) that I highlighted on last evening's chart, but it also happens to be the area of the daily pivot (D-PP), as well as that of the 78.6% retracement of yesterday's decline. Therefore, be on the lookout for an upward knee jerk reaction targeting 1251 right around the Fed announcement, followed by a potential sell-off to complete the recent consolidation. Of course, sustained trading above 1251 puts a dent in this speculative view. With that said, another area from where to expect a potential reversal to the downside is 1245-1249.  Yes, I'm sounding overly skeptical because I don't believe the Fed will deliver a QE3 surprise.  Despite that, I'm still holding my positions in AAPL, CTXS, and VMW.




Trade Well,

Peter