For those new to trading around major news events (like today’s FOMC meeting), today’s reaction could not have been more classic and perfect. In yesterdays newsletter I wrote: “General theme for FOMC days is price doesn’t do much into the meeting, then the initial reaction move is often a trap, followed by the “real move”
This is, of course, exactly what happened. FOMC was at 2pm, ES initially plunged hard (the trap move), followed by a massive 100+ point reversal. Yet another example here of one of my favorite fake breakdown trades also. ES lost 4285 support briefly, recovered, then we squeezed hard.
The question of course now is, what’s next? The answer lies in the triangle pattern ES is building, but likely still some turbulence ahead