Trade Aptitude

Results of Tuesday’s Best S&P Turning Points: Price reacted wildly to the CPI release cancelling the short level @ 4123.50, the long level never triggered. 

Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets): 

Holding off on reversal trades today with continued volatility expected from the FOMC Announcement & Press Conference. 

Globex View: Ranging. 

The World Sentiment Index: (+100/-100) DROPS from +36 to zero in a world of mixed sentiment and low volatility. No historical edge. 

Catalysts: Import/Export Prices @ 8:30. EIA Petroleum Status Report @ 10:30. FOMC Announcement @ 14:00. Press Conference @ 14:30. 

Quick Tip: FOMC Trading

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. But the price reaction is way too fast to trade without slippage. 

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.

The move widens consistently during the second interval: from +29 to +33 points and -17 to -24 points. 

When should you trade? After 3PM ET. Maybe a little before if the volatility and slippage calm down. 

Trade Fearlessly,

Mike Siewruk 

P.S. Feel free to share this blog with all your trading buddies.