FOMC Day Coming Up, Volatility Expected: July 27th Plan
After 3 days of chop in a tight sideways range, we got what always comes out sideways ranges: A clean, mostly one directional trend day. In yesterdays newsletter, I wrote: “My general lean remains that we sell down to 3920, probably 3895, then try to bounce. Ideally, we can sell there before FOMC Wednesday, like tomorrow”. This played out very nicely, closing the day at 3920ish as did the corresponding short from 3965 mentioned in last nights newsletter. Level to level trading.
Ultimately though, its all noise as tomorrow is FOMC day, and I consider FOMC days to be the most complex, highly random, and also quite often trend defining days for SPX. It typically delivers big volatility but due to the trapping that is usually present, is also one of the worst days of the year for trading in particular for newer traders. This will be followed by GDP on Thursday.
In todays newsletter, I will quickly recap todays trading, discuss how prior FOMC days played out, and talk the path forward into Friday