Energy Has Been Building for a Move

With this morning's bounce attempt off 2120 support on the S&P 500 Index apparently failing, sellers are in control of the initiative for now as we head into the FOMC tomorrow afternoon. Of course, there are plenty of other events which could help sway the market, including Facebook earnings, a jobs report on Friday, and the election next week, just to name a few. 

But to keep things simple, the descending triangle on many major averages, including the S&P (seen on the daily chart, updated below), is resolving lower below 2120 amid many individual stocks seeing less and less momentum in recent weeks. 

At a minimum, this type of action behooves us to keep long exposure light and tight, while selectively taking on some shorts. If The Fed does ignite a rally starting tomorrow into next week, it is worth keeping track of relative strength stocks holding up well.

However, a breakdown is a breakdown. As long as 2120 remans breached, bears have a chance to wreak some havoc well before we can discuss any type of holiday rally. 

More in my usual Midday Video for Members.