FOMC Day Tomorrow - Expect SPX Volatility. November 2nd Plan
After Friday’s monster 144 point green day (which in itself was the 5th green day in the prior 6 six day span) ES took a minor breather today and corrected and chopped around. As I’ve written all week, the Monday and Tuesday before FOMC are typically noise as the market seldomly commits to anything before the meeting.
It is important to note where was stand in ES as we head into this majorly important session: We rallied significantly over the past month, and on Friday, we broke above the 50 day MA for the 4th time this year at 3850, and back-tested today. While the technicals are constructive for bulls, FOMC can throw a wrench in anything and the only thing certain about FOMC days is they are usually, trap filled and incredibly volatile.
Traders need not look further than the last FOMC for an example, where ES initially spiked down 60 points, spiked up 90 points, then plunged 155 points all in the 2hrs after FOMC. Be prepared for similar. In today’s newsletter, I’ll be talking the standard FOMC pattern, how I’m trading tomorrow + targets, then breaking down my core trading setup - the failed breakdown.