The Daily Market Forecast
Tuesday’s Best S&P Turning Points Results: Neither trade suggestion triggered.
Quick Tip: FOMC Trading
The most effective habit a trader can develop is detailed review. Journaling, watch recordings, data capture. Do it all every day. Think of yourself as a professional athlete. Your coach would have you watching films of your performance.
Today is FOMC day. This is an ideal time to look back and review the S&P price action on prior FOMC days. The pattern tends to be range-bound before the announcement and spiky afterward. This should help your trade selection and planning. In fact, if you have solid historical data on your strategy’s performance on FOMC day you might not trade at all. It’s always better to have some probabilities at hand. Keep accurate records whether you took the trades or not.
The announcement releases at 2PM ET. You might think the highest volatility is within the 30-minute interval afterward. Historically, it’s the next 30-minute interval when the press conference begins (see chart).
Direction and move for both intervals: 64% UP, 36% DOWN.
The move widens consistently during the second interval: from +29 to +33 points and -17 to -24 points.
Are there any actionable rules you can apply? Maybe so, maybe not. But it’s worth analyzing your strategy’s prior performance during these times.
The World Sentiment Index: (+100/-100) DROPS from +7 to -14 in a world of mixed sentiment. Historically the market closed UP from the open 74% of the time.
Catalysts: Existing Home Sales @ 10:00. EIA Petroleum Status Report @ 10:30. FOMC announcement @ 14:00, press conference @ 14:30. Putin escalates.
Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets):
Exit longs @ 3966.50, aggressive traders could short 3966.50, stop 3971.25. If that fails buy 3970.50 on the retracement back, stop 3965.75.
Buy 3736.75 stop 3731.00
Trade Fearlessly,
Mike Siewruk
P.S. Multiple strategies, software tools, teammates, and coaching. Learn why you should join our team here. For a personal consultation to assess fit (without selling) email me for an appointment: mike@thedailymarketforecast.