Your MUST-READ Morning Stock Futures Cheat Sheet: Trading FOMC Day

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The Precise Take – Trading FOMC Day

Big Picture Analysis:  After an opening dip yesterday, the ES traded up 20 handles to test its Monday high of 1214.50 to the tick, then promptly reversed and sold off to the morning low into the close.  While things looked bleak earlier in the month, over the last ten days, technicals and market  internals have strengthened considerably such that we believe we are close to forging an intermediate term rally.  For the short term, a market-clearing flush down to 1150 or even 1130 would be constructive; however, it is possible the markets will rally from current levels.  A push below 1130 with a deteriorating picture in Europe would likely change our bullish view.   With expectations running high (and in many different directions) for today’s FOMC Announcement, we are likely to see a big move.  If to the upside, we should keep in mind that the QE2 November, 2010 announcement was a short term sell-the-news opportunity; however, a definitive push above the late August highs around ~1225 might be the “all aboard” signal.

Trading Today:   Below are marked the support and resistance areas.  Regardless of the initial direction of the post-announcement move, there is often a reversal, so traders need to be agile with a mind toward risk management.

Today’s  Scheduled News (all times EDT)

Major Market Movers
Existing Home Sales at 10:00 am
FOMC Announcement at 2:15 pm

Minor Market Movers
EIA Petroleum Stats at 10:30 am

Tomorrow’s Scheduled News

Major Market Movers
Jobless Claims at 8:30 am

Minor Market Movers
Leading Indicators at 10:00 am

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