Last week, we were looking for a big move higher in oil… soon.

And boy, did we get it. Oil popped nearly 15% higher on Monday.

Here’s the updated chart…

Oil broke out to the upside of the consolidating triangle pattern and it rallied all the way up to $63 per barrel – the exact target of the pattern.

You won’t find a better example of how technical analysis plays out. This chart was building up energy for a big move. And, the bomb strikes on the Saudi oil fields provided the necessary catalyst.

With that in mind, let’s turn our attention to the broad stock market and today’s FOMC announcement.

The S&P 500 often makes a big move in reaction to an FOMC announcement. And it sure looks like the market is gearing up for a big move later today.

Look at this five-minute chart of the S&P 500…

Starting at about mid-way, and through the day on Monday, the index got stuck in a ridiculously tight seven-point trading range (the blue circle on the chart).

Think about that for a moment…

Even with all of the millions of investors and all of the trillions of dollars at stake, the most popular index in the world spent one and a half days trading inside a 0.2% range. This happened while the price of oil was screaming higher, while tensions between the United States and Iran were heating up, and while traders braced for the impact of an FOMC announcement.

As we saw with oil, these tight, consolidating patterns serve to build up energy to fuel the next big move.

Now… This is a five-minute chart. So, we’re not expecting a move on the scale of oil’s move on Monday (which was based on a daily chart). But you can see how all of the various moving averages have coiled together on the S&P 500 chart. This tells us that energy is building. And the index is gearing up for a move of up to 20 points or more in one direction or the other – either up to the most recent resistance level at about 3020, or down to the most recent support at 2975.

Patterns on the five-minute chart tend to play out within a day or two. So, it seems reasonable that the catalyst for a large move today will be the FOMC announcement this afternoon.

If the action over the past day and a half was too slow for you, then cheer up. There’s a bigger move coming after 2 p.m. today.

Best regards and good trading,

Jeff Clark

P.S. A week from today, I’ll be in Carlsbad, California, for the second-annual Legacy Investment Summit. There, the brightest minds across Legacy Research will cover topics like the new precious metals bull market, blockchain, cannabis investing, and so much more.

And, that just scratches the surface. We’ll also hold panels and breakout sessions for unique, off-the-cuff insights. Naturally, I’m in a panel called “How to Make Money in a Bear Market,” alongside my colleagues Nick Giambruno, Jason Bodner, and Teeka Tiwari. It should stir up a lively debate…

If you aren’t able to attend in person, I understand. It may be a long way to travel on such short notice. But thankfully, there’s a way for you to see nearly everything the conference has to offer… in your bathrobe, if you like.

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Reader Mailbag

Today, one subscriber thanks Jeff for his Delta Direct blog…

I read Delta Direct two or three times a day, because it calms my nerves about the stock market. I no longer have to stare at my stocks all day in my brokerage account. I am free to do other things and not be a slave to fear or worry. Many thanks. I absolutely love it.

– Daniel

Another thanks Jeff for his recent gold call

The recent gold downtrend is in place and you really nailed it for us subscribers. Thanks for your daily commentary. It’s really appreciated.

– Roger

Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming at [email protected].