At the end of the day on Tuesday I had shown the SPX 60-min chart with all the trend lines that price has been bouncing off and said we're not getting follow through on any of the moves.
SPX 60-min chart:
On the one hand it looks very bullish the fact that price has been consolidating sideways for weeks which could be just as effective in relieving the overbought conditions as a price pullback. That's why I've got the key level to the upside identified at 875. Any rally above the April 17th high (near 872) would be bullish. Whether it would rally to only 900 or up to 1000 can't be known but it would clearly say you need to abandon the short side (and you may need to do it quickly as I suspect there are a lot of stops up there).
The difficult part for me at the moment in anticipating a breakout to the north are things that I see in the techs. I've shown daily and weekly charts of NDX and even MSFT that strongly suggest we've got not just a decline coming but one that should take us to new annual lows. So one pattern that jumped out at me tonight as I looked over the 60-min chart and all its trend lines is the possibility we're forming a diamond top. These are bearish reversal patterns and typically have lots of choppy price action as distribution kicks in (selling into each of the rally legs) until finally it breaks down. Therefore a break below 835 would signal a bearish breakdown from this pattern.
SPX 60-min chart:
That's a 40-point spread between key levels but that's as close as I can get them without risking whipsaws. Follow the price break of either one (maybe after the FOMC announcement on Wednesday afternoon). The top of the diamond top pattern, the downtrend line from April 17th, is currently near 870 so watch price action around there.