Update at 2:30 pm

Here is a five minute bar chart of today's trading in the e-minis. My original range estimate is the blue dotted rectangle. I have adjusted it to make this morning's low the low of the rectangle (solid blue rectangle).

The market has reacted very bullishly to the Fed announcement. However, we must remember that at today's high it is up almost 130 points in about 8 trading days. So I am inclined to think that the very high volume bars you see associated with the Fed upsurge constitute a buying climax. If so the market will not move above the 800 level before it drops below 780.

Initial support on the way down is at the purple dotted line near 770 which is the midpoint of the reaction from yesterday's high to this morning's low. The next support level is the mipoint of the Monday-Tuesday reaction from 771 to 746 - roughly the 759 level. I think that tomorrow is shaping up as a down day and that a reaction of 40-50 points will be the next significant development.

By the way, I think the Fed announcement is very bullish for the stock market. The Fed plans another big expansion in its balance sheet which will take the form of big purchases of longer term debt of all kinds. This will push more liquidity into the economy and some of this liquidity will find its way into stocks.