FOMC Day Incoming - Expect Volatility in SPX. Can Bulls Hold The Low? September 20th Plan

As mentioned in the past 3 newsletters, late last week ES entered into infamously the most bearish two weeks of the year seasonally on average. I wrote yesterday: “Despite the bounce, today was a very muted session but with FOMC Wednesday and with this week being the most bearish stretch of the year seasonally, it is sure not to last”. “Sure not last” was right and after yesterday's relief pop higher, we took another leg down today before a big afternoon bounce. And it's no coincidence where we bounced.

This week further demonstrated the power of simple chart patterns. As readers recall, my rally target all last week/zone to short was 4565 as this was resistance of a picture-perfect multi-month triangle that I've discussed at length. We sold 100 points off there and where did ES find support today? Technicals 101, right at 4467ish triangle support. All the moves since Friday were generated from two simple lines, with great precision.

We have now made a full resistance to support move, and to make things more interesting tomorrow is FOMC day - notoriously the most volatile, decisive days of the year. Is the bottom in? In today's newsletter I'll talk this, then I'll go over my approach for trading FOMC days. I'll then provide the actionable trade plan for tomorrow.