FOMC minutes out --> Bullish, Bounce from moving averages, Stochastics, MACD up --> Long --> $540 profits
5 min Emini Nasdaq 100
Hi,
DId you trade the morning sessions today? I stayed out of the market until the FED released their minutes.. There were a confluence of factors when the minutes were released that led me to go long... Firstly, price was very near the moving averages and it bounced up. Secondly, immediate reaction to the minutes was good... Thirdly, Stochastics was forming a double bottom and fourthly, Short-term MACD cut its signal line up..
I longed 1 contract at 2185 and when price dropped to 2182, I longed another contract.. I held my position all the way till 2192 when I exited with a profit of $540. Notice that Stochastics and short-term MACD turned downwards when i exited?
Fundamentals:
Wall Street advanced sharply Tuesday as investors interpreted minutes from the Federal Reserve's last meeting as indicating the central bank is ready to keep cutting interest rates to boost the economy. The Dow Jones industrial average and Standard & Poor's 500 index reached new record highs.
The minutes from the Federal Open Market Committee's Sept. 18 meeting, when Fed governors voted unanimously for a half-point cut, also showed that officials were concerned that the weakness in the dollar could lead to higher inflation. But the Fed -- signaling it is more willing to intervene -- also said the economic outlook was uncertain because of the summer's credit crisis, and that there were still risks to growth that justified lower rates.
The major indexes were little changed just before the minutes came out, then rose sharply. Investors were hoping that the Fed would lean toward future rate cuts; central bankers will meet again Oct. 30-31.
"This adds fuel to the fire that the Fed is going to try and reinvigorate the economy with further cuts, and that's what they are committed to," said Richard E. Cripps, chief market strategist for Stifel Nicolaus. "The likelihood of having a second cut either this month or at the December meeting seems greater than before the minutes."