Wednesday 24 October 2012

2pm update - awaiting the Fed

The FOMC are due to make a statement at 2.15pm EST. There could be a little volatile chop in this hour. Considering the 15/60min cycles - and when you take into account the earlier failed opening rally, I'm inclined to believe we could see a late day sell-off.


sp'15min



vix'60min


Summary

A Fed day is usually not one to be trading on. The volatility alone can make things too annoying for most. Yet, QE3 is already announced, there really isn't anything for the bears to fear until next spring - when I believe the Fed will increase purchases, at which time the mainstream will have realised the US is also in recession.

If we see a late day sell-off, and trade below yesterdays 1407 low, I will be tempted to close out before the close. However, we have durable goods orders data tomorrow morning, and I believe that will only add to the underlying moodiness out there.

Primary target remains 1395/1400, but a test of the 200 day MA @ 1375 seems increasingly likely, especially if we get close <1400 tomorrow.

Ohh, and don't forget...we have QE3 GDP on Friday.

back at 3pm.