QQQ SPY DIA 

The Fed announced their decision, a 75 basis point hike, which was not unexpected at all, they announced it here at 2:00. And the market ( NYSEARCA: SPY ) kind of gyrated around a little bit. It initially went up a little bit and then it came down, you can see it here. This is 2:00, and then finally, here at 2:45, 45-minutes later, this thing finally closed up here.

So during that time, between 2:30 and 2:45, the market started to rally and it caught some kind of direction. Prior to that, basically the whole day really, we were just getting this. You’re getting the same thing with the Qs ( NASDAQ: QQQ ), you name it. I will show you the vaunted Dow Jones Industrial Average ( NYSEARCA: DIA ) but I really just want to look a the Qs ( NASDAQ: QQQ ) here.

So we get this sideways move and then come 2:00 the Fed does what it does. The market does what it does, which isn’t much. And then finally, we get a move up. So this was really, on a short-term basis for day trading, this was really the time that you could buy it. This is a 15-minute chart, we can cut it down to a minute and get an earlier buy point. But what I wanted to show you is this, the volume-weighted average price, that’s this orange line. That’s the average price that a stock trades at according to volume. So it is weighted by volume, not by price, different than a moving average.

But for most of the day, and this just reflects very light volume, everybody agrees that this is the price so it is not moving much. And then the initial reaction, down here, was below the volume-weighted average price. But then what happens? The stock gets sucked right up to the volume-weighted average price and then it blows through it. And then from that point on it stayed above there.

Now, we get the same thing with the SPY ( NYSEARCA: SPY ); it blew through there and then stayed above there. So it was only at this point when it became clear that the buyers were outweighing the sellers, that they were more aggressive than the sellers were because this is staying above the volume-weighted average price.

And it is more remarkable that it was right into the close. Because during the day people are doing what they are doing. Okay fine, but as we get into the close they are kind of finishing up what they are doing and they are looking at what tomorrow is going to bring. And so, generally speaking, you have got to look at this market, towards the end of the day, being skewed to the buyers.

Let me get to a clearer chart. Here’s the issue, that’s day trading stuff. Here, this is a very, very solid ceiling right here, 390.00 here on the SPY ( NYSEARCA: SPY ). And so that gives us, what, 10 points, 2.5 percent before we get a hard ceiling? So as I look at this, I think the entire day is kind of a wash. What it didn’t do was give the bulls more credibility for moving higher because this was actually a pretty crappy close. It was essentially right in the middle of the intraday trading range.

And so this was not decisive one way or another. All it showed on that intraday look was that into the close there was move buying. But here’s the question, is it maybe short covering because we’ve got options expiration the day after tomorrow? There’s a boatload of puts outstanding and so we could very well see more of a rally tomorrow and into Friday. Tomorrow would probably be the day that they start closing out those puts.

What I am telling you is this, you can only read so much into the intraday trading activity. But then when you go out longer-term, in this case just on a daily bar chart, you do have to kind of start looking at other things, such as options expiration in a couple of days. Again, just based on what I am seeing here, you are going to have some room to the upside. You are going to have options expiration, you are going to have those puts either being closed out or rolled out. And so I would say, over the next couple of days, we are probably going to see more of a lift. I would just suggest that you not really look too far into it.

SPY QQQ 

This is Scott with your Chart of the Day. I want to take a look at the SPY ( NYSEARCA: SPY ) and the QQQ ( NASDAQ: QQQ ). As we know we are all kind of waiting for the Federal Reserve, what are they going to do with interest rates this time around? Is it going to be 75 points? Is it going to be 50 points?

We are all kind of waiting, and the market, generally, has been rough, it’s been bad all year. It’s been a great kind of a day trading market or a 59-minute trading market, as Dan Fitzpatrick calls it. Swing trading you have got to kind of wait for your pitch. And so as a swing trader that is kind of what I am doing. I am looking for a nice strong upside reversal coming on higher than average volume.

Now, in terms of levels on the SPY ( NYSEARCA: SPY ), we are kind of eyeing up this 200-period simple moving average on the weekly chart. That comes around that 350.00 level. If I zoom out here you can see this blue line has been pretty important. When we’ve been below it has been bad news. When we get above we get a nice little trend.

We are still above right now but I kind of think the market wants to test this zone because it’s been tested in pretty much every major downturn in the last 10-years. And so here we are again, are we going to test it? Are we going to stay above and hold above and do that on volume? So that is kind of the level I am watching here on SPY ( NYSEARCA: SPY ), right around that 350.00 zone.

On the Qs ( NASDAQ: QQQ ) you can see, they have been weaker and so we are closer to that 200-week simple moving average. And I kind of have the feeling that because tech has been punished more than most of the SPY ( NYSEARCA: SPY ) this could be the signal that turns first. And even zooming out here, again, it’s the same thing. Every major downturn we’ve tested it and either held above or not. And when we hold above good things happen.

And so here we are, QQQ ( NASDAQ: QQQ ), coming closer to this 200-week moving average, right around the 260.00 level. I think the 260.00 zone is pretty important here on the Qs ( NASDAQ: QQQ ). And that 350.00 level is pretty key here on the SPY ( NYSEARCA: SPY ).

Now, in terms of getting in first, there is a lot of fear, at least that I am seeing in retail traders in terms of, I have got to buy the dip, I have got to buy the low. I need to buy the lowest possible point. For me, that has never really worked, I have never been a great bottom picker. If I try and pick a bottom chances are I am getting stopped out because I’m not good at it.

What I want to see from the SPY ( NYSEARCA: SPY ), again, is a strong move, ideally around that 350.00 level coming on higher than average volume. But I think it is okay to wait for that. Wait for that confirmation of higher prices. Because all year long if you have been early you’ve been wrong. And so you don’t want to be early, especially in a strong downtrend.

David Ryan who is a world investing champion said something that really kind of struck a chord with me today. I even tweeted it out, it just has to do with the market generally. What we have seen the last couple of days, even here, 1, 2, 3, 4-days in a row, the market opened strong, as it opens greenish, and then closes weak. It opens up, closes down. Opens up, closes down. Opens up, closes down. Now, that is what happens in weak markets, we get a strong open and a weak close. In strong markets, we get weak opens and strong closes.

And so that is what you want to look for, in my opinion, to really kind of get active in this market. You want to look for a market that opens up lower and closes up stronger. Because that tells you that the buyers are now in control. And we haven’t really seen that for any length of time in this sequence here. So watch for that, for a potential trend change, and don’t feel the need to be early.