Uncertainty Reigns Ahead of Fed

Markets experienced some large volatility this morning but are now quieting down ahead of the Federal Reserve statement. The declining 5 day moving average continues to be a problem level for the $SPY $QQQ and $XLF The $SMH is in much worse shape and gives us reason for concern.

On a larger timeframe (not shown), the $SPY continues to trade below the downtrend line connecting from the July highs as well as below the declining 200 day moving average. At the same time, it is holding above the 20 and 50 day moving averages. See how clear that is? Exactly, markets are still telling us that uncertainty is high.

For the markets to be able to sustain any upward momentum, the pattern of lower highs and lower lows below the declining 5 DMA will have to be broken, at a minimum.