The FOMC Rally Strikes Again, Can It Last? June 16th Plan
Another FOMC day behind us and as far as FOMC days go, this one was fairly predictable. As I discussed in yesterdays newsletter, FOMC meetings are notorious for the “fake first move”. The last two FOMC meetings (May and March) both followed this script with 50+ point selloffs right after the 2pm announcement, followed by 100+ point rallies (9% and 3% respectively).
Today did the exact same thing, we saw the fake initial sell of about 60 points, held supports nicely, then went into a 100+ point short squeeze. I wrote yesterday: “After 5 red days, my lean is that we do put in either a green day tomorrow, or a hammer type candle (washout then recover). Loss of 3720 from here would trigger the downside/washout scenario. I am currently trying a long here on the late day recapture and would lock in level to level (3795 1st, 3830 second etc)” and we got to 3830
The flip side of these FOMC rallies of course, is they all failed to new lows shortly after. In today’s newsletter, I’ll talk what kind of legs I see this rally as having, and what the risk points are triggering next sell.