Today the S&P 500 traded all over the map. The index opened higher and traded up for most of the day before flushing sharply lower on the announcement from the Federal Reserve that interest rates would remain low until at least 2013. After the initial flush, the major indices rallied to make new highs on the day.
From the low of today to the close, the SPX closed up over 70 points. This sort of action, combined with very high volume, is a sign of a possible reversal.
If this rally holds into the open on Wednesday morning, I am very cautiously calling for a short term bottom in the markets. I bought a small long position in the SPY shortly before the close of trading and it is already trading up sharply higher. If the rally holds, I'll be looking to sell at the following resistance levels:
Each dotted blue line corresponds to a fibonacci retracement and/or a pivot low or high. The SPX can easily pull back at any of these levels, but I think the best resistance will be at the 61.8% retracement at approximately 1250.