FOMC Meeting Begins Today

The Bulls gave a very strong performance yesterday pushing the DIA once again to new record highs.  A major influence in the rally was the strength shown in the financial sector ahead of the FOMC.  The FOMC meeting begins today with the odds of an interest rate increase in December now above 60%.  The market will be heavily focused on their statement tomorrow afternoon, and as such we could see some choppy price action as we wait.  The rally is now 7-days old so it would be normal to see the market take a little rest or even experience a light volume pullback.

On the Calendar

The Tuesday Economic Calendar begins with Housing Starts at 8:30 AM Eastern.  Forecasters are expecting a rise in August 1.173 annualized rate vs. 1.155 in July.  Housing permits are expected to decline from 1.220 million vs. 1.223.  Also at 10:00 AM is the less important Import Export Prices.  Consensus has Import prices rising to 0.4% and Export prices falling by 0.2%,  Of course, the big news on the calendar is that the FOMC begins their 2-day meeting with the announcement scheduled at 2 PM Eastern on Wednesday.

On the Earnings Calendar, w have just short of 20 companies reporting earnings today.  The most notable today is ADBE, FDX, AZO, BBBY, and CPRT.  Of those only BBBY reports before the bell while we will have to wait until after the close for the others.

Acton Plan

Once again the futures are pointing to a positive open today.  The DIA and IWM both closed yesterday holding up quite strongly with the QQQ’s, and SPY struggled to hold the morning bullishness.  With the FOMC beginning their meeting today it would not be surprising to see the market become choppy as it waits for their decision.  There could also be some market tremors depending on the news out of the UN as Trump call for further action against North Korea today.

The overall trend of the market remains bullish, and as such I will look for new long trades.  However, I do want to acknowledge that the run sharply higher the last seven trading days and rest or pullback are not out of the question.  The last thing I want to do is to become overly long when the market is at new highs after such a strong run-up.

Trade Wisely,

Doug