By Mike Paulenoff, MPTrader.com
A very interesting day today after Tuesday's Fed-inspired sell-off -- and I say "Fed-inspired" in that it was a news-related, "sell the news" type of situation, although technically they were ripe for such a reaction in an intermediate-term sense. As you've seen our charts posted, the intermediate-term situation has multiple momentum non-confirmations of price strength going back to the early part of November, if not the middle of September.
In any event, from an extreme near-term perspective, we were looking for a little more upside after the Fed meeting yesterday to retest the early am highs. For example, we were looking for a move from 1066 back up to 1070-72 in the E-mini Dec S&P. It did not transpire, got to 1069 or so, and then collapsed to 1059 and change, which was a significant hold above Monday's low at 1057.75.
All the action in the early part of today has been countertrend in form in the way the market has traded. The question is how high, or what magnitude, the countertrend rally would move to? In fact, it moved to 1063, and then the market collapsed from there in the S&P. We're trading right now at 1058