SHORT TERM: another volatile day that ends relatively flat, DOW +30

Overnight the Asian markets were all higher. Europe opened higher and closed +1.55%. US index futures were higher overnight, and at 8:15 ADP reported their job loss numbers at -203K v -227K. The market continued to move higher and gapped up at the open to SPX 1051. At 10:00 ISM services reported in at 50.6% v 50.9%. The market continued to rally until about 11:00, when the SPX hit the OEW pivot at 1061, and short term momentum was overbought. A pullback followed as market pundits awaited the FOMC announcement. At 1:45 MSFT announced it was laying off 800 people. Then the fireworks for the day began, when at 2:15 the FED FOMC statement was released: http://www.federalreserve.gov/newsevents/press/monetary/20091104a.htm. After the statement the SPX quickly dropped to 1049 by 2:30, and just as quickly reversed. In the next 10 minutes the SPX rallied to the highs for the day, right at the OEW 1061 pivot, and then turned over yet again. Heading into the close the SPX hit a new low for the day at 1045, and it closed at SPX 1047. For the day the SPX/DOW were +0.20%, and the NDX/NAZ were mixed. Bonds lost 8 ticks, Crude gained 60 cents, Gold added $8.00, and the Euro was higher. Support for the SPX remains at 1041 and then 1018, with resistance at 1061 and then 1090. Short term momentum was overbought this morning, and dropped past neutral at the close. Tomorrow, the weekly Jobless claims at 8:30, along with Productivity and Unit labor costs.

Today's rally carried the SPX right into the OEW 1061 pivot. This rally has been choppy from monday's SPX 1029 low, which is exactly what was expected. The 32 point rally is fairly close to a 50% retracement of the 72 point decline from SPX 1101 to 1029. The market did get overbought on the hourly and short term charts, which is what should be expected during a Minor wave 2. Also, we might consider this an ABC rally as well. The short term charts indicate that the market has turned over and Minor wave 2 may be complete. FOMC days are often retraced the following day. So tomorrow's action should confirm if Minor wave 2 is still ongoing, or Minor wave 3 is underway. Best to your trading!

MEDIUM TERM: uptrend remains in jeopardy

LONG TERM: bear market

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987