Market Update Into September 25th: FOMC Strikes Again!

This week, all eyes were on the FOMC meeting and the subsequent comments from its chairman, Jerome Powell. Market participants were clearly spooked by Powell’s notably hawkish stance and, as a result, the indexes sold off sharply, breaking below important support levels. Many are now calling for a continuation lower, so let’s dig into the charts and see what we can glean from them!

Weekly Analysis

This week, the SPY ETF closed at $430.42 (-2.92%), breaking down below the rising wedge its been in for several months. Below is a Fair Value Gap and a volume gap, and the CHATS indicator is testing the zero line. A break below the zero line would signal the move from a ‘weak uptrend’ reading to a ‘weak downtrend’ reading.

This is a weekly chart of the SPY index.

This week, the QQQ ETF closed at $357.91 (-3.48%), breaking down below the ascending channel it’s been in for quite some time. Below lies an important Fair Value Gap as well as a volume gap, which can be magnets for price. The CHATS indicator is still reading above the zero line, which means that although the upward trend is weakening, bulls are still technically in control.

This is a weekly chart of the QQQ index.

This week, the IWM ETF closed at $176.67 (-3.84%), and the head and shoulders pattern that many traders have been pointing to has come to fruition with a strong break below the neckline and through the volume gap. This index appears to be targeting the bottom of the longer-term ascending channel it has been in for many months and the CHATS reading below the zero line and decreasing means that the downtrend is increasing in momentum.

This is a weekly chart of the IWM index.