Since yesterday's high, the UltraShort S&P 500 ProShares (SDS) has declined from near the top of its June price channel (59.50-60.00), to the bottom of the channel in the vicinity of 56.40. The low today so far is 56.50. Purely from a technical perspective, my question is whether or not the decline will hold around the channel support line, or if the line will break on the way towards a "gap-filling" expedition down to 55.60?

The fact that today is Fed Day adds some intrigue and uncertainty to the situation. Typically, the post-FOMC announcement involves a number of knee-jerk directional moves, one of which could spike down into the 55.50 area to fill the up-gap left behind on Monday morning. That said, as long as support between 55.60 and 55.30 remains viable, the overall bullish pattern will remain intact. If 55.30 is violated and sustained, then I will be expecting additional weakness that revisits the lower support band established during June between 53.00 and 51.50.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.