What if?

Waiting is never fun.  It allows the mind to wander through all the “What If” scenarios and invites speculation of the unknown.  The financial media will do it’s it part to whip up the emotion with dramatic headline graphics and bumper music that would make Hollywood jealous.  What does all that drama and speculation accomplish?  Nothing but make us emotional.

The “what if” game is endless and unproductive.  We still have to wait for the FOMC decision, and no one knows what that will be until its released.  Will they add additional interest rate increases to the forecast?  We will find out at 2:00 PM Eastern and no amount of talking head conversations will change that.

What we can do as retail traders is prepare.  If you’re very nervous about the announcement, then perhaps your over-trading and need to make some adjustments to your risk.  If you’re new to trading or lack sufficient experience for such events perhaps standing aside is your the best course of action.  Work to make good business decisions without bias or prediction and be prepared to react without emotion.

On the Calendar

A big day on the Economic Calendar on this hump day.  We get started with important reports at 10:00 AM Eastern when Existing Home Sales which consensus expects a slight increase to 5.420 million annualized rate.   At 10:30 AM the Petroleum Status Report which as recently shown a decline in supplies helping to bolster oil stocks ever so slightly.  After that it’s all about the FOMC Announcement at 2:00 PM along with the FOMC Forecasts.  Then at 2:30 PM the newly seated Chairman Powell will have the entire world focused on every word he utters during the Press Conference.

On the Earnings Calendar, there are 56 companies expected to fess up on their quarterly results.

Action Plan

Today the entire financial world will be focused on the FOMC and what our new Fed Chairman will have to say at the press conference.  Based on his introduction speech where Chairman Powell seemed to lean hawkish has the market speculating more interest rate increases in the FOMC forecast.  Interest-sensitive securities have experienced some selling this week in anticipation of this report.  It’s understandable that the market is pensive as we wait for their decision but all the speculation is, and drama is a waste of time.  As retail traders, all we can do is wait for the decision and react once the decision is known.

I’m expecting choppy price action ahead of the 2:00 PM announcement.  However, after the release of the statement and forecast, we can expect very wild price action as the market reacts.  Today is likely too much more volatile than we have recently experienced.  Currently, the futures are pointing to a mixed open.  The spooky thing is that the DIA and the SPY are sitting right on the edge of a very steep cliff.  Any miss step or poorly chosen word could easily push them over the edge.  Let’s hope that’s not the case and instead that Chairman Powell offers a steady hand that prevents a fall.

Trade Wisely,

Doug