Outlook 12/18: Stock futures are higher on Wednesday morning as traders looked ahead to the Federal Reserve’s December interest rate decision. The Fed’s policy decision is due at 2:00 p.m. ET. Fed funds futures trading currently shows a 95% chance that the central bank will cut interest rates by a quarter percentage point. Investors will also be paying close attention to Fed policymakers’ Summary of Economic Projections and Fed Chair Jerome Powell’s press conference, seeking clues about what might happen in the months ahead. The central bank is widely expected to temper expectations of more rate cuts in the approaching year, particularly as inflation remains stubborn.
ESH25 (MAR2025): YVAH 6135 YPOC 6130 YVAL 6122 GAP 6125
/ES Plan: Yesterday market closed bearish (PBT 6108), but overnight looks more balanced, moving within previous value, so these're the opening and initial balance options for current session:
A) If market moves above YPOC 6130 with bullish internals, buy towards YVAH 6135 GAP 6149 magnet YHOD 6153 and ATH 6164.
B) If market moves below YPOC 6130 with bearish internals, sell towards YVAL 6122 YLOD 6144 and HVE-PBT 6108 magnet.
Rollover week. Pace of the Roll is around 65%. I'm quoting /ESH25 (Mar 2025) due to March volume is higher than December contract. Usually rollover days show big divergences between Stocks vs. Futures, so try to play these days on defensive mode. Setups that usually work well, may fail completely.
FOMC days are two separate sessions. The AM session tends to involve a tightening price range and lower activity. Trade setups that work well in the AM, may fail completely in the afternoon, resulting in significant losses. Today is NOT the day to trade aggressively. On these high volatility days, a lot of money could be made and lost but your first trading rule is 'manage your risk', sizing small with less /ES emini contracts or using /MES micro futures.
Market Movers
10:00 AM Atlanta Fed's Business Inflation Expectations
10:30 AM EIA Petroleum Inventories
02:00 PM FOMC Announcement
02:30 PM Fed Chair Press Conference
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