Turnaround Tuesday - or at least the beginnings, as traders brace for FOMC on the Wednesday prior to opex week

People started recognizing a turn down in the equities markets today - so maybe it can have been "Turnaround Tuesday"! As the Tuesday before opex week, and following on last week which was also new month-new money time, it was a natural time for the markets to weaken off after the significant levels we know were tested last week, and as many traders rolled forward options positions. Or - was it in the stars, or more properly planets? If you read Raymond Merriman's weekend update, you know what I mean!

The VIX moved smartly up, and Bill Luby of VixandMore blogspot tweeted that it would be a breakout at $27 ... well, it just could not manage that, but the drop back could be seen as testing support around $26. Then again - we've got the FOMC tomorrow, so when you put together the Fed plus "Weird Wollie Wednesday" in one day, it definitely makes for Game Day tomorrow!

Trader Brian has contributed some comments which I'll copy in below. Meantime - I also want to remind folks what I tweeted today - that so far it looks like an orderly pullback off last week's test levels, and many indices and sectors reached either 20-day moving average support or 50-day MA support. So once again, these factors along with Fed Day, not to mention the ChartsEdge map pointing the way to a bounce after the intraday low, suggested to consider the potential for pullback upward to be the next play, even if just for daytrading. Speaking of daytrading, how 'bout our "string" holding in again, with the levels of 992 and 997 in particular?! I've got something of a theory about why the string of numbers ending in "2" and "7" has been working so well for us, but I don't want to jinx it by publishing it, so let's just go with it so long as it's working.

Swing traders must have a different focus, of course, so even the rise in the afternoon would not have been enough to persuade swing traders to get or remain long ... more like something to factor in for the timing of a sell (or defensive/short), backstopped at last week's highs.

Anyway, here are Trader Brian's comments - as you review his ideas, and check out his charts (sorry, only provided the links and not sufficient time to go out, collect and post tonight), remember what I've said about stop levels and all that - got to consider as part of your trading time frame and style!

Good stuff some short signals
QID- Nice base, MACD and Slow STO crossovers
SRS- Three days of heavy buy volume

DXD- Base and nearly crossovers
SDS nearly MACD and Slow STO crossovers

http://stockcharts.com/h-sc/ui?s=QID&p=D&b=5&g=0&id=p93162734387

And here's a look at one of my daily charts of the SPX - it still carries the annotations from when we pointed out the index losing support and rolling over; then when it firmed up again to break higher and above 912. And now the droop again (with the indicators in various stages of doing the same). Interesting that the 940 level that Andre mentioned is right by a support/resistance pivot previously marked on it months ago by now (also close by Tony Caldaro's 935 pivot). Looks like the 50-day moving average is around there too. So despite whatever shenanigans we may see on Fed Day tomorrow, this is the area to keep in mind for the type of major wave B pullback that's the least we'd expect (using Tony Caldaro's OEW nomenclature).