Blog

All eyes on the FOMC and do we or do we not have a tapering of QE? This market has become the market of parsing words from everything the FED speaks. I’m writing this as the market closes at the lows after what seemed like some clarity from the fed that they MAY start to taper later this year depending on the unemployment rate and other economic numbers.

We as traders need to trade cautiously during these days unless you are at keys levels looking to buy or sell responsively. Has todays move cleaned up any of our recent consolidation? The answer is not NOT YET. What is going to be the fallout from todays market reaction.

The chart shows the composite POC 1621 which represents all the volume from the beginning of May when this move began. The market closed just in front of it. This level may give a short term bounce for the longer time frame traders to decide is this the pull back to go long or is it the pop to get swing short. The overnight trade will be very interesting from this level as  market participants may need to push back up to get short.

This week is also quadruple witching which in itself creates of lot of volatility let alone FOMC the same week.  The next two days may not give us a clear direction as to next weeks moves as if this is the start of a correction then the rallies will be sold trapping people who are buying this dip. IF we begin to close under this 1621 level this will open the door for a push back to the lows and my guess is it will go right to new lows this time there will be not stopping at 1601 or 1595 pivots. Or even teh 50dma to stop it from going lower. This will be the pullback that is well needed to create structure at these new levels in order for the bull to push into 1700 and beyond.

Keep your eyes on the composite value areas and watch for this levels as attraction or rejection points.

 

Happy Profiling