...The next chart is the S&P500 Index Divergence vs S&P500 MACD
Graphics courtesy of The Chart Store
Both of these suggest a pullback is possible; Given how stocks have traded on prior FOMC days, and the Dow up 175, this suggests caution may be warranted here . . .
And from Minyanville:
The last 6 times we had an FOMC meeting, the S&P 500 typically responded in joyous fashion, closing in positive territory 5 times, with an overall average of +2.4%.
But a cruel fact of life is that the hangover is never as much fun as the party, and over the next 2 days, the S&P was positive only 1 time out of 6, with an overall average of -1.6%. It would average -2.8% without including that one winning trade, which happened to give back all its gains and then some within 4 more sessions.
The futures have gapped up by +1% or more the morning of a scheduled meeting only twice before, on March 18, 2008 and January 28, 2009. Both times, the S&P managed to add an additional +1% or more during the day. But the harder you party, the worse the hangover (usually), and the next day the S&P was lower by more than -2.5% both times....MORE