Referring to chart 1 below, red wave a ended near 1307 this morning, giving way to the wait-and-see wave b. Chart 2 suggests a flag-like countertrend rally in wave b that should set the stage for red wave c to begin shortly after the FOMC meeting. The initial target is 1302 to 1304.  REMEMBER! This is a forecast, not a trading plan. I'll be sure to tweet a short trade entry if one should present itself.

On the market profile chart below (30-min timeframe), the 1313 area should prove to be a resistance hurdle. However, a last-minute spike to the 78.6% retracement level ahead of the FOMC decision cannot be ruled out.


Chart1. A rough sketch of the anticipated decline pattern. Red wave a ended higher than anticipated.



Chart 2. A bear flag (or possibly a wedge) is suspected in wave b that began on the heels of this
morning's wave a decline.


Chart 3. The market profile chart. Resistance exists in the 1313 to 1314 area.

Trade Well,

Peter