Prior to the FOMC announcement, we do nothing - no new positions are entered in this period.
It seems that markets are poised for a move up, simply waiting for the FOMC headline to come across the wire at 2:15pm. You will find the text of the announcement posted on the Federal Reserve website at that time.
Let us add a note of caution to this seemingly optimistic picture - in the past we have seen markets test either side of the current price range by 10, 20, 30 points or more in Nasdaq futures and a relevant amount of swing in SP500 futures. During these wild swings - which typically start in the minutes immediately prior to the FOMC release - many traders loose thousands as stops are run quickly in illiquid markets. Very often, the initial move is exactly wrong, and the market quickly reverses to the confoundment of many.
Despite this being a regular phenomenon, people insist on trying to game the FOMC release time and again. There is always time, and always another trade to be had - its not our job to capture the exact bottom tick or the exact turn of the market, and clearly intiating a new position during the insanity of the FOMC news release shifts risk up the scale considerably.
Instead, sit back and watch the spectable from a position of safety - and we'll look for opportunities to arise post-news release.
Active Trader and Strategies for Sucess subscribers - if you are able to visit the TrendVue Trader Talk forum at this time, there will be plenty of analysis and commentary taking place in real time once the news is out. / Mike
04.05.04 13:55 #