I ended my post yesterday with a simple wish – that the wild ride in SPX continued. It seems my wish was granted as SPX exploded right back to the upside today, erasing all of the losses from yesterday and then some. The key level of 7626 was broken, though not by much. 7650 seems to be the point of resistance for the time being.

The story today is similar to the story we saw during the last FOMC meeting in late July. Wednesday down, Thursday up big and from there we all know what happened. If you need a refresher, that is when SPX rallied 500 points in 5 days. So far, the story is almost identical. If tomorrow we see another huge push higher, then we might be seeing history repeat itself.

On the daily chart, I have marked with the blue arrow the previous FOMC day. The big red candle was Wednesday, and then in the highlighted section we can see what happened on Thursday, Friday, Monday, Tuesday etc. Obviously the candle today isn’t the same as that previous Thursday candle, but the move up is very similar.

If SPX continues to push higher tomorrow, then we might have to give this theory a more serious look.

Tomorrow is triple witching expiration, which is generally a slow, boring and sideways day. If we get a huge explosion to the upside again, then I don’t think the upside momentum can be ignored.

Taking a closer look, I have marked 7680 and 7720 as the next key levels. We can assume that if 7680 breaks, then 7700-7720 would serve as the next magnet. If both are taken out tomorrow, then I would give some serious light to the theory that we are seeing a repeat of the last crazy up move.

The crazy part is that despite a nearly 90 point up move today, SPX is still technically negative for the week. If we see a repeat of this tomorrow, then both of those marked levels would have been broken and SPX will be nearly at the upper end of the expected move.

We’ve seen crazy stuff happen before, just 45 days ago. I would not put anything past this market.

The momentum is pointing very clearly to the upside and today showed it. We gapped higher and stayed higher all day, closing within 10 points of the intraday high.

I suspect this should continue tomorrow and into next week. Triple witching might be a brief pause, but if the momentum is as strong as we think it is, then that shouldn’t matter either.

7700 and 7610 are the important levels for tomorrow. Does the back and forth continue or are we just ripping to new all time highs from here?

Good luck!