What matters this week is the ability to hold the 2111 high made last week and the line that sits overhead about 5 points higher than that. When I played with the math I found that the November high was an exact tag off the 1810 low and a projected 2306 high at 61.8 based on that low. Even when I was as bearish as I was to start the year I never expected 1738 to be broken immediately yet price projects lower targets than that. I bring all of this up because the bull potential is still very much alive in my view.
On to FOMC: Since last September our FOMC highs have been
October 2116.48 (made 3rd of November)
January 1947.20 (made 1st of February)
March 2056.60 (made March 22nd if using the immediate high after FOMC)
Off each low whether made the week of or week before the gains from low to high were +93.56, 99.26, 83.46, 74.50, and 87.35. The high made on April 20th would have had a rally counted from the 2022.49 low right after the March FOMC high. This was +88.56.
2020.86-2022.49 has been tagged before, during or after the last FOMC highs back to September aside from the February 1st high that fell short. Last September we created a low a week ahead at 1927 which if we recall was the secondary high off the January meeting.
At this point breaking the low last Monday at 2073.65 should hunt one of the other FOMC highs before a significant bounce. Basically a range of 75-100 looks likely based on history. Since we are sitting here going into a month without a Fed meeting I believe the corrective high should come about 5-6 points lower than the 2111 high. You can take note of what happened here back in August or for that matter the beginning of December near this level. Technical stuff favors the bears the way I see it here so the preference would be to see the April 20 high hold then reevaluate the trade and the trend. I am leery if we head lower first since we are sitting 6 months off the November high and 3 off the February high. A low going into the 1st week of May could create the elusive higher high that appears to be looming.
Yikes put together the list (hat tip) of FOMC weekly closes dating backwards: March 2050, January 1940, December 2006, October 2079, September 1958, July 2104, June 2110, April 2108, and March 2108