FOMC Tomorrow. Can The New SPX Rally Survive? March 18 Plan

Key Takeaways

• ES broke 6819 support, fell to 6658.
• Failed breakdown at 6689 sparked short squeeze.
• Bulls recovered 6689, pushed to 6808.
• Next test of 6819 hinges on FOMC outcome.
• Traders watch for volatility spikes around policy decision.

Summary

S&P 500 futures (ES) lost the 6819 support level early last week, dropping to 6658 before staging a rebound. A failed breakdown at the 6689 shelf triggered a short squeeze that lifted prices to a 6808 high, aligning with the author’s rally plan. The next hurdle is a back‑test of the 6819 resistance, which could be disrupted by tomorrow’s Federal Open Market Committee (FOMC) meeting. Market participants are weighing whether the rally can survive potential policy‑driven volatility.

Pulse Analysis

The Federal Open Market Committee’s (FOMC) policy meeting is a calendar event that routinely injects uncertainty into equity markets. Investors anticipate clues about interest‑rate trajectories, inflation outlook, and balance‑sheet adjustments. Historically, the S&P 500 experiences heightened volatility in the hours surrounding the Fed’s statement, as market participants scramble to reprice risk. This environment can either amplify existing technical trends or abruptly reverse them, making the FOMC a pivotal catalyst for short‑term price action.

Technical analysts have focused on a “failed breakdown” pattern that emerged around the 6689 level in ES futures. After the index breached this shelf, short sellers were trapped, prompting a rapid squeeze that propelled prices back above 6740 and ultimately to a 6808 high. The pattern underscores the importance of well‑tested support zones; once a shelf is defended, it often becomes a springboard for bullish momentum. The next critical test is the 6819 resistance, a level that previously anchored the market and now serves as a barometer for the rally’s durability.

For traders, the convergence of a technical breakout and a major monetary policy announcement creates a high‑stakes decision point. Position sizing, stop‑loss placement, and options strategies must account for the dual risk of a swift reversal if the Fed signals tighter policy, or a continuation if the commentary is dovish. Monitoring real‑time order flow and volatility metrics will be essential to navigate the next trading session, as the market’s reaction to the FOMC could set the tone for the broader equity rally in the weeks ahead.