SP500 waiting for Jerome Powell with promising sell signal

This week is extremely interesting thanks to the packed macro calendar. We already got the inflation data from the US and today, we will find out the attitude of the FED and which kind of bird they represent – a Dove or a Hawk. All of this, of course, affects indices and, for example, on the SP500, we do have a very interesting trading occasion.

Yesterday, SP500 managed to create a shooting star candlestick on the daily chart (green). The candle is not present in an ordinary, random place but on a crucial, long-term down trendline (red). What is more, we can see a substantial horizontal resistance here – an area around 4150 (orange), which has been a key S/R since the end of February.

The price creating a bearish pattern on such resistance is a negative sign and normally, it would claim a sell signal, but FOMC tonight might change everything. It is still uncertain what FED will do and what will the outcome be, which implies the randomness of the current situation on the chart. After FED, more things will become clear. The price climbing back above the orange area would be a strong buy signal and, conversely, the price breaking the blue support would be an invitation to go short. Let’s wait for Jerome Powell and find out.