Last Yellen's FOMC

Outlook 01/30: With the outset of the Jerome Powell era only days away, analysts do not expect a dramatic shift at the Fed's policy meeting today, which will be the last for Chairwoman Janet Yellen. While the benchmark interest rate will likely remain unchanged, in a range between 1.25% and 1.5%, investors are still anticipating three rate hikes this year. Another big event today will be the Treasury's refunding announcement, which will include details on first-quarter auctions and possibly other funding needs for 2018.

/ES Value: YVAH 2831 YPOC 2828 YVAL 2822

/ES Plan: Yesterday closed balanced. Overnight is bullish (GBT 2848) moving few ticks above yesterday's value, so we've these options:

A) If market remains above YVAH 2831 with bullish internals, try to be a buyer leaning on 2831-30 towards ONH 2839 and LVN 2846 GBT 2848. Failure to take out ONH 2839 early is a signal of weakness.

B) If market starts to move below YVAH 2831 with bearish internals, try to be a seller leaning on 2831-2830 towards GAP 2824 ONL 2822 and LVN 2816. Failure to breakdown YVAH 2831 early is a signal of a strength.

Tips: We are gapping down double digits away from yesterdays range. Larger gaps may not fill or will fill only partially on the first day. If the gap fills and value cannot get to at least overlapping, then the odds of a late day rally increase.

Note: FOMC days are unique events that call for increased attention and a shift in tactics. It’s best to treat FOMC days as two separate sessions. The time before the announcement, which tends to involve a tightening price range and lower activity, which gives way to a sudden burst of volatility that continues into the close. Trade setups that work well in the morning session may fail completely in the afternoon session, resulting in significant losses. If you've a winner AM session, I suggest to avoid FOMC's PM 'cowboy' session.

Today's Economic Calendar

09:45 Chicago PMI
10:00 Pending Home Sales
10:30 EIA Petroleum Inventories
02:00 PM FOMC Announcement

Disclaimer: All information on this outlook is for educational purposes only and is not intended to provide financial advice.

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