With FOMC meeting during next week, major markets traded to targets area, e.g. Qs 48 +/-. Qs near daily DTL after tagging 47.79 with 48 +/-R, DOW 12891.86 with 13000 R, Nasdaq 2422.93 with daily DTL at 2450 +/-.
Since the double bottom, as noted on 3/17 and 3/18, after testing LT supports, as shown on the weekly charts markets traded to weekly resistances after breaking out of the falling wedges noted since 3/19/08. Falling wedge formation is a bullish pattern. Since the 3/17/08 double bottom at SPX 1256, DOW 11756, Nas 2155, and Qs 41, markets have rallied 11%, 10%, 14%, and 17% respectively from the lows. I noted the double bottom in Jan-Mar 2008 likely to be the low for 2008 with the target of SPX 1650 as commented on 1/25/08.
I expect a pull back after the Fed announcement from the current resistances as we are at ST cycle pivot going into next cycle pivot in Jun. I am anticipating SPX 1330 +/-, Wave 2, will hold closing gaps which we have and that will set up Jun rally going into EOY. This is the "Wave 4" scenario from the Oct 2007 top. During Dec 2007, I explained technical and fundamental readings going into Jan-Mar 2008 double bottom as a meaningful correction from the Oct 2007 top.
While markets have not broken out of the IT down TL above 1400 +/-, I believe that markets will break above it going into EOY to SPX 1600 +/-.
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