Fed holds rate at 5.25%, unchanged for fifth straight meeting --> stock surges --> $900 profits.
5 minutes Nasdaq 100 Emini
Hi,
How's it going lately? market activity is subdued infront of the FOMC announcements... I did not trade for the morning session... I went for a jog in the morning and walked my dog.. :P...
ya, you guessed,, its a bad idea to trade before important economic announcements... if you get it right, good luck.. if you get it wrong, you know its because market's behaving irrationally before the announcement.. My advice? stay out of it.. simple.
Today's trade? simple again.. I monitored the market at 1415...and had my CNBC switched on... well,, they said FOMC left the rate unchanged at 5.25%... thats good.. but how does that relate to our trading plan? is it going up or down? I don't know... the best way to find out is by observing the market..
I see a huge reaction and a big spike up... hey,,, I know immediately that this must be good.. and I have to go long... I longed 1 contract at 1790... and when it pulled back 10minutes later,, I longed another 2 contracts at 1790 again.. indicators such as MACD (both long term and short term) and stochastics confirmed the move ( orange circles)...
Now its a matter of just waiting for the trade to work up... price rose all the way to 1807... and showed some sluggishness.... confirmed by the indicators again ( green circles)... I got out at 1805 with profits of $900..
Fundamentals:
Like clockwork, Federal Reserve officials emerged from their meeting at 2:15 p.m. Eastern time. The rate-setting Federal Open Market Committee (FOMC) said it would keep the federal funds rate unchanged (at 5.25 percent) for the fifth straight meeting.
advertisementThe accompanying statement, which is always dissected on the Street for nuances and hints of future action, noted that "some inflation risks remain," but was perceptibly more upbeat toward economic growth and inflationary pressures, observing that "readings on core inflation have improved modestly in recent months." "Recent indicators have suggested somewhat firmer economic growth," the report said, and even referenced the chance of some stabilization in the beleaguered housing market.
For the first time in five meetings, the vote to keep rates steady was unanimous, as previous dissenter Jeffrey Lacker, head of Richmond's Federal Reserve Bank, is currently not a voting member of the FOMC.
Market-watchers were expecting the rate announcement to be a non-event, but the accompanying words of cautious optimism have driven some buying power into the market averages.