Daily update 7/30

Another ho hum day as the market awaits the FED meeting tomorrow.  Clearly earnings are not enough to push the market higher.  It needs another catalyst.  Will the FED provide it or talk about taking away the punch bowl?  There are still a of lot people that believe the FED will start to taper in Sept.  If that is the case they will be sending a signal before then.  Here is the daily SPX chart.

Today was a very narrow range day with the close near the middle of the price range.  The volume increased significantly over yesterday.  Was that caused by people selling into the gap up this morning?  Here is the SPY 60 minute chart.

SPY gapped up over the 50 SMA this morning, but again failed to stay there.  Rally chasers are still absent.  I am sure that is because of the FED meeting this week and a worry of taper coming soon to a FED near you.  It looks like price is forming a slightly upward sloping price channel.  A break of either of those trend lines could see some follow through.  I suspect that will happen tomorrow after the FED announcement.

SPX has closed inside the range of the key reversal day four days in a row.  This market is wound up for a big move now.  The extreme overbought condition has been mitigated considerably.  Now we just need a catalyst to spur people into action.

Bob