The Fed induced sell off undid the gains generated by bulls yesterday, but the selling wasn't enough to write off the breakouts altogether. However, another day of selling tomorrow will lead to breakout failure, trapping those buyers. Bulls aren't totally out of the picture - the breakouts haven't failed, and indices are closer to support. Buying at the open with a tight stop could be an interesting day trade: the S&P illustrates the long side potential with a stop on a break of the 50-day MA which is also channel support.

In the run up to today's Fed announcement, markets made an early break past resistance - following the S&P's lead, which made its break on Monday. The semiconductor index posted the most significant move, as it was able to close at a new multi-year high. The gain was enough to reverse the bearish cross is +DI/-DI (although with a weakening ADX, the importance of such a cross is reduced).  The break is also good news for the Nasdaq and Nasdaq 100, as they seek to make new multi-year highs of their own.

Okay, bulls couldn't hold all of their gains by the close of business, but their attempts at breaking the consolidation still have merit.  None of this changes the overbought condition of breadth metrics , but it suggests a mini-rally could emerge before breadth is again in heavily overbought territory. The S&P managed to edge a break of declining resistance on confirmed accumulation. Bearish technicals remained bearish, but the net technical picture is still bullish.

While Thursday's rally favoured bulls, with buyers jumping in at channel support for the S&P and 50-day MA for S&P and Dow, Friday took some of this gloss off - but didn't reverse all of the gains.  However, market breadth remained in the bearish camp, with breadth metrics either overbought (Bullish Percents) or declining (Summation Index).

Sellers kept the pressure on, but volume was lighter than yesterday. The S&P finished at channel support and will find itself under pressure tomorrow. Technical weakness expanded with a 'sell' trigger between +DI and -DI.

Yesterday's highs remain the risk metric for new short positions. Bulls were unable to maintain their late morning advance after opening gaps down across the indices. Until such highs are broken, the near term short position remains favoured. The S&P saw increased volume in confirmed distribution.  It was accompanied with a 'sell' trigger in On-Balance-Volume.  In the near term, there is an upcoming convergence between declining resistance and rising support of the channel.  Channel support is also aided by the 50-day MA. Support should be stronger, but take nothing for granted!

No real surprises with today's trading: narrow action on light volume.  The biggest gainer was the Russell 2000, but it remained below rising support and the swing high.