14 Sept 2015 - Approaching Clarity?

The obvious here is that the eventuality of a rate hike is near, but will it be this month?  Some speculate that the FED needs to raise rates now to build up some cushion for what is about to come for the rest of the world.  While others think the FED should hold or even add more QE for fear it might derail an already weak world economy from growth.

I think that the FED has its choice on either a "hold and see", or "raise and stay".  With this move I think it allows them a more stable ground to work with compared to other options available.  It would still move the markets short term but it would dissipate quickly.  However, the long term outlook does not see us coming out of an already bearish sentiment, so time will tell how long the FED can keep delaying the inevitable unwind.  Below I have drawn up a possible pattern that could unfold based on a good news FED Wednesday...  The key here though is the low made by the 10% draw down that I mentioned last week as well.

I believe the range of indecision to be between 1972 and 1920.  A break of either these levels would constitute bearish bullish outcomes.  So be on the lookout for the breaks.  A breakdown could land prices at the 1800 level, while a break upwards could push us near 2040-2050.

Indicators are still showing bearish trends, and we must keep this at the top of our priority.  Options expiry also occurs this week so it is a very interesting position to be in and highly likely a volatile one.

SEN: Bearish
ST: UP
PA: NA