How will the stock market react to Yellen today?
I should never sleep in! Woke up at 5, about 2 hours late for me and a computer crash first thing:)
I am going to make this very short this morning.
My entry at the close yesterday worked out well, as I exited this morning in SSO with almost a 1% gain.
These trades do not come around very often but they are very high percent trades. They can be scary buying at the close in what looks like a plunging market. However, for this trade anyway, buying when everyone is fearful could not be more appropriate.
Today we have a large gap up in the markets, but both breadth and price have reversed somewhat. So its important to see if the gap holds this morning and if not what kind of downside we get from here.
Importantly today the Fed gives their report. Typically I would be looking for a rally after the fed report. However, things are not that typical right now.
This is Yellen’s last Fed announcement before she leaves. Will she continue with rate hikes or let her replacement determine monetary policy?
That is the question. Conspiracy hawks are thinking her rate hikes were designed to undermine the Trump economy, while more level heads have indicated that it was time to start gradually raising rates.
Either way, however, the consensus is she will leave rates unchanged. That would be the correct thing to do and let monetary policy be determined by the new head. But, we will see. Something tells me that Yellen might raise rates today by a 1/4 %. But I would say my opinion is not that certain. Perhaps a 1 in 5 chance she raises rates!
If she does, the market will be down 200 points in a heartbeat. So be aware of the Fed announcement. If she leaves rates unchanged I have no idea right now how the market will react. A lot of things going on, most of which I have talked about before.
I am going to leave it here this morning.
Have a good trading day!
If you want to follow some of my trades along with my thoughts typically given after the open you can go to @rickjswings. Typically I talk about the overall day expected with the markets and also give some levels on the ES and NQ for failed breakout scalping.
It’s my private twitter feed for the stock market and its free. Sports Handicapping is the subscription-based part of this site. But considering the cost of joining it’s almost free:)
Good Luck Today
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