A Steady Market Ahead Of The FOMC (QE) Announcement And Fireworks

Welcome back gang! We’re going to look at the stock index futures tonight. The key thing from this morning was this. The Russell actually showed some extra weakness and were pushing through the speed lines to the downside. However the other 3 stock index futures were not coming along for the party on this one. I warned people in the trading room that taking shorts in a situation like that can be more dangerous if you’re going to be more aggressive because you’re not getting everyone coming along for the party. That will be the theme for the next day or two as we’re pre-FOMC. In general the overall theme will be looking for longs over the speed lines and looking for shorts under the speed lines. As the FOMC comes out with its policies of quantitative easing here. Wednesday all bets are off and initially I’ll step aside after that announcement comes out for the first 30-45 minutes. Between Tuesday and Wednesday morning I’m going to be focusing on what’s happening here. Holding above even the Russell after dipping down into the weakness this morning ended up closing right near the high of the session as far as the U.S. regular trading hour’s session.

As we’re going ahead and taking a look at the stock index futures, the bottom line is steady as she goes for now, looking for longs above the speed lines and shorts down below with all four stock index futures need to be on that side of the trade to take it, or you’re asking for extra aggressiveness and extra risk. A couple of things to note here along those lines as we talk about risk, I’ve been talking to you about bonds and this continues to be the case even today once again. Even way back here I said look I want to back off the bonds here, because now we refer to them as the kill zone, so we continue to be in that kill zone once again today. The whole concept of the kill zone is where my speed lines are in direct conflict with a bit more major trends. What this does is it creates a shooting gallery back and forth as they come closer and closer. You can even see that in the last several days. That’s what I was warning about from way back here. The speed lines at the resistance of the downside and support on the upside here. It will continue to be the case going into today.

Let’s take a look at Apple for a moment. It was down 11 cents for the day and kind of paused out. What we have to realize between now and the FOMC on Wednesday that with the policies will cause a great deal of market moving action with the announcement of continuation or discontinuation as its set initially here. Once all that information comes out that’s going to give this market a whole another jolt. So in the meantime we’re just buying our time.

You can even see that here with gold. It was a pretty tight day comparatively speaking with the gold days. You can see it sitting on the edge of abyss, and continuing where we have inventory retracement bars in the area here. We have a lot of support and resistance right in that tight range there. Be on guard between now and FOMC. We’re going to take it slow, steady, and consistent and focus as much as possible to trade with those directional indicators on an intraday basis. Holding off really on any big decisions until we get through this quantitative easing announcement with the FOMC as it could go ahead and cause this market to really take a ride. Remember what I said with the weekend analysis. We got a lot of great comments on that. I’m happy to do those for you gang, but remember what I said. None of this really matters right now this week. Let the fireworks fly post FOMC. None of it’s going to matter until we reevaluate this as we close up the month of October as I mention to you the reality it’s probably going to take the month of November to get a better feel directionally for the market for all the reasons I shared with you on the weekend videos.

With that being said you guys have a great night. I look forward to seeing you tomorrow in the Live Trading Room or tomorrow night in our nightly newsletter videos.

Leave a comment!
Read previous post:
Rob’s Big Picture Focus Points For The Stock Market

Welcome back everyone! As we go ahead and wrap up the week and look into the next week and beyond....