Here’s a novel way to look at it:
Almost as entertaining as the market’s reaction to the event itself is Thursday’s reaction to what a bunch of clowns pretending to be in control of the economy had to say about the economy and by extension their policy supposedly governing same.
Market participants, black boxes and substance abusers alike might want to keep a couple of things in mind; 1) inflammatory news events are fleeting in their effects (and look at how quickly the gold sector, one standing to gain from a weak economic backdrop and its implications for policy, head faked up and reversed down) and 2) after the FOMC Minutes release in September the market cheered and zoomed higher after the Fed punted. It then immediately reversed into a downside leg that became the bottom re-test.
The significant retracement that I was looking for yesterday never happened, as a triangle formed and then broke up, annoyingly after SPX and RUT both first broke rising channel support. The channel support that held was on NDX, and there is now a perfect rally channel there that I’m going to be using as my marker to show as and when this rally ends.
You probably won’t see a triangle on the charts easily but that’s because it was just an EW triangle. These often look like classical triangles but equally often don’t. This one below on NDX looks like a classical rectangle, but if you look at the RSI 14 then you see the underlying triangle there, which is generally the case. NDX has started a thrust out of the triangle and if sustained then the thrust should form a pattern, and then break down into a full retracement of the thrust. All of the sell signals from yesterday morning are still in place so as and when this thrust fails it will most likely fail hard. NDX 15min chart: