Big Rally Ahead of FOMC, but Real Test for SPX Still Ahead. Sept 20th Plan
FOMC week is underway in ES. In my last newsletter, I wrote: “My general lean is we see a relief bounce to 3925” and this played out perfectly. Of course though, today is just Monday and the real catalyst is still ahead with FOMC on Wednesday. FOMC and CPI Days are routinely the most volatility inducing days for SPX.
CPI last week triggered biggest 1 day sell since March 2020, and the last 4 FOMC days delivered 2.58%, 1.52%, 3%, and 1.12% green daily moves. Importantly, these moves (on Wednesdays) triggered significant moves for the remainder of the week. In the case of last FOMC - big green days the rest of the week. In the case of May and June’s FOMC meetings, 3%+ red reversal days, crushing longs who chased.
In todays newsletter, I’m going to talk how I traded today including a detailed breakdown of a textbook example of my core trading setup today and talk what I see into FOMC and how I’m positioned + the bear case.