This morning I am more confident that my previous inverted head and shoulders scenario may still take place (view my chart here). I originally thought that 1620 on ES would be the head. Well, market had a different plan. I must adjust, as that is the only way to survive in this game. So 1620 remains just as pivotal, but it may now be the point of right shoulder. If this is the case, a 50-point projection above the neck will take the price to new high @ 1696. Could it happen right after FOMC meeting? Fed would have to not taper, or not even mention the tapering (a stretch), in order for that high to occur.
It is important to point out that should 1620 not hold on two daily closing basis, last week's lows would probably get retested, with 1605 as the last line in the sand on the way there. Something would have to go seriously wrong at the FOMC meeting for lows not to hold, or it may happen even sooner because of nervous anticipation of tapering at the meeting. This last scenario may actually give Fed some room to maneuver at the meeting, where they could go into the details of how they will taper, or even do a slight tapering (a stretch again), since the market will already be down, pricing in some kind of policy change. It's all about the Fed from here to Q2 earnings reports.
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