FOMC Tomorrow - Big Volatility Incoming. What Way? November 1st Plan
This week began with ES breaking the deepest sell cycle of 2023 -which saw 8 of the last 9 trading days red before Monday - by finally capitulating and putting in a green day yesterday, and following up today. My plan for this week as stated on Friday was simple: We begin a relief leg up and get long when 4153-47 reclaims. Reclaiming this level made the Friday afternoon selloff a failed breakdown/capitulation move, and almost all lows are caused by this exact setup. We reclaimed yesterday, back-tested, and up we’ve gone.
I was holding longs into today as written yesterday, and I concluded yesterdays newsletter by writing the following: “In general as long as 4147-53 keeps holding, the [relief rally] attempt is alive. My lean is we can base build between 4153-4193 then attempt higher to 4205, 4225-30”. This is what we did today, and we spent the morning base building largely under 4193 before getting a push to 4205+ target.
While the new relief leg is underway, there is a problem: FOMC is tomorrow, and these are notoriously the most volatile, complex, and defining days of the year. Can bulls keep it going? In today’s newsletter I’ll talk this, discuss my comprehensive strategy for trading FOMC days, then provide the actionable trade plan for tomorrow.