Big FOMC Volatility, But What's Next For SPX? December 15th Plan
We have finally concluded two back to back days of the most volatility and trap inducing events for ES. Yesterdays CPI certainly delivered on this reputation, with price spiking 150 points, then retracing 150 points within a few hours to end yesterday relatively unchanged at 4050. Then today, FOMC delivered on its end of the bargain.
We saw an initial 80 point spike down, followed by a 65 point spike up, followed by 30-40 point selloff. This is classic random, trappy, algo-driven FOMC action. In yesterdays newsletter, I wrote extensively about the importance of ES (March contract) holding the 3995-4k level, and how this was an area I’d be interested in longing. After FOMC today, we spiked to 3997 low of day and saw an precise bounce out of the zone for 70 points, before retracing most.
While there has been tons of volatility the past two days, there is a problem: It was tons of volatility to go nowhere, and we are still stuck in the same sideways range we have been for well over a month. This won’t last forever. In today’s newsletter, I’ll be talking what this now means big picture, how I traded todays mess via yesterdays plan, and the actionable plan for tomorrow.