On Thursday, the SPY continued higher up beyond the 110.50 level which had been prior resistance and closed right near the declining 50 day moving average (green average on right). The recent rally also brought the SPY up to the 61.8% retracement of the 2010 high to the low of the year. After the close, the Fed shook the markets up with a change in the discount rate and at last check, the SPY was trading at 110.16. The best potential levels for near term support are now found near 109.75 and then near 109.00. Friday is options expiration day and that would have been a reason for heightened risk management, now we have a gap lower to deal with which will make an even more cautious approach more prudent.