On a day when the Fed did nothing, but projected a bleak outlook going forward and no new revelations came out of Europe to relieve the Greecy mess, the stock market went . . . . . . UP?
Yep: 1.61% for the SP500, 1.53% for the DJI, and a measly 0.87% for the NASDAQ. How to explain? Will, since the top last Thursday, the SP500 has complete 5 waves down, and now there is a correction at some small level of trend.
Here is a longer range view of action over the last year and a half. Again, we see trends within trends and trends faltering at their respective midlines.
The wide channel, outlined in brown, goes back to the 3/6/09 low of 666.79. Within it is the green channel originating with the 8/31/10 low. Note that the trend fails exactly where the two trendlines converge. Yesterday's purple channel is back as well. Extrapolating its midline back shows that it was a support resistance line during the last throes of the brown and green channels.
The red lines represent horizontal support and resistance levels.