In Jerome We Trust
FOMC is today and it's kind of a big deal.
9/20/20232 min read
My post content
Today is the day. For all those who celebrate, Happy FOMC Day! The day when some traders throw all common sense and strategy out the window and simply FOMO into whatever move the market makes. Stare at your news feed anxiously awaiting that interest rate decision and then watch the chart and decide long or short. Press the button and pray. There is no other way.
Well, there really ARE a lot of other ways. This go-around we won't delve into all the possible FOMC strategies, but if you're new to trading on FOMC day it's probably best to sit the whole day out, or at least sit out the afternoon and only trade in the morning. There's no worse feeling than being nice and green on the day and then you try to trade during FOMC and give it all back and a bunch more. There's nothing wrong with playing to your strengths and if news trading isn't a strength, feel free to kick your feet up on your desk and just observe with your hand safely off your mouse.
Personally, it doesn't really look like the interest rate decision is going to be the main factor in determining which direction the market does this afternoon. Pause or not, most big money should be looking at the dot plot to determine what the FOMC participants think will be the longer term interest rate levels--AKA, when will they start cutting rates. A lot of people have their bets on rate cuts in Spring 2024, but considering the current strength of the economy (read: low unemployment) those cuts could be pushed back to Summer 2024 or later or may not be as deep as many think they will be.
Of course, outside of the dot plot, many will cling to and parse every word Jerome Powell says during his 2:30pm press conference. Reactions to the answers he gives to questions from journalists have really spurred the "real" move the past few FOMC days, so that roughly 45 minute period when Jerome stands at the podium will be the true test. In Jerome we trust.
The NQ levels for today:
Current Price: 15410
Upside Targets: 15460, 15500, 15530, 15590
Downside Targets: 15405, 15360, 15330, 15292, 15260
Stretch Targets (we'll give two up and two down today): 15625, 15665, 15220, 15155