SPX is Testing a 30-Year Trend Line

Today is, of course, the infamous Fed Friday, so all eyes will be turned toward the Fed announcement later today (or should that be "all ears"?).  It's expected that Fed Chair Janet Reno will finally reveal exactly WHAT happened in Waco, Texas nearly 23 years ago, when she was Attorney General.

Wait!  I'm thinking of the wrong Janet.  Hang on, let me consult my notes here...  Okay, my notes say I'm supposed to get a gallon of milk and something called "Orange Pineapple Tang" on my next trip to the grocery store, so I'm just going to have to wing it on this FOMC thing.

Without more than a cursory glance at what the analysts are saying, I'm going to safely assume that bulls are hoping the Fed will say something dovish, such as: "We only use Dove Brand Moisturizer, here at the Fed," while bears are hoping the Fed will remain hawkish.  The overwhelming consensus among analysts is undoubtedly that the Fed will, indeed, say something -- but there is probably a lot of disagreement about what exactly that will be.

The charts seem to reflect a slightly undecided market, and there's still no real change since SPX, RUT, and NYA captured their respective downside targets, but I have drawn up a few new charts of SPX.

We'll start with a five-minute chart, then move onto a weekly chart.  Keep in mind that trades today are best approached with the understanding that FOMC days often mix headfakes and whipsaws into the action:

The long-term SPX chart reveals that the market is currently testing an interesting trend line, which has acted as both support and resistance over the past 30 years:

Here's a zoomed-in look at the chart above:

Nothing to add on the hourly chart, but the charts above should have provided some added perspective:

 
And finally, RUT is back-testing its broken red channel:

In conclusion, the market is "secretly" testing a very long-term trend line, and sometimes that in itself causes some volatility -- so, combined with the pending Fed statement, the second half of this week might get interesting.  For the moment, I remain content to let the market lead until the pattern clarifies again, but I'm also inclined not to get too bullish until the market reclaims, and sustains trade north of, the aforementioned long-term trend line.  Trade safe.