FOMC Week Coming Up - Volatility Likely Ahead: September 19 Plan

While this week featured a historic day on Tuesday (the largest red day since the covid crash), next week has the potential to see more of the same in terms of big, bi-directional squeezes. Why? We have a confluence of factors: SPX is entering the back half of September which is (on average) one of the most bearish/volatile phases of the year. In addition, we have FOMC on Wednesday and every FOMC this year has delivered big moves (typically to the upside).

The only way to trade a week like this one coming up is level to level, one move at a time, and this approach worked very well last week. In my last newsletter Thursday published when ES was 3910, I wrote: “my general lean is we work lower to the yellow wedge support at 3860-50 then try a good bounce there.” This played out Friday, and we sold into 3860-50, then rallied.

This takes us to Monday. In today’s newsletter, I’ll be talking how I traded Friday’s action via the plan, talk how I’m positioned to start next week, then talk what the triggers are to start any next leg down.