Outlook 12/13: U.S. stock index futures are pausing for breath ahead of what is expected to be the Fed's third interest rate increase of the year, as well as forecasts on the U.S. economy, tax reform and next year's rate hike cycle. Higher interest rates are expected to lift banks stocks, while the pace at which the Fed intends to tighten and normalize monetary policy is seen as a key factor in maintaining the current bull market in 2018. Today will also be Janet Yellen's final post-meeting press conference as Fed chair, as current Fed governor Jay Powell is set to take over from Yellen in February.
/ES Value: YVAH 2672 YPOC 2671 YVAL 2667
/ES Plan: Yesterday market closed bullish (PBT 2679) leaving a new record high (ATH 2673). Overnight inventory is bullish (GBT 2673.50), moving within yesterday's value so as usual we've these options:
A) If market remains above YVAL 2667 with bullish internals, try to be a buyer leaning on 2667-2668 towards ATH 2673 and PBTs 2675-2679. Failure to breakdown YVAL early is a signal of a strength.
B) If market starts to move below YVAL 2667 with bearish internals, try to be a seller leaning on 2667-2666 towards LVNs 2662 and 2658. Failure to take out ONH early is a signal of weakness.
Tips: 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. Here is a simple FOMC strategy.
Today's Economic Calendar
10:30 AM EIA Petroleum Inventories
02:00 PM FOMC Announcement
02:30 PM Chairman Press Conference
Link for Updates (Check it during RTH session)
Disclaimer: All information on this outlook is for educational purposes only and is not intended to provide financial advice.
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