Another Federal Reserve week is here and the excitement is building. Well, not for us, but for many it is and they cannot wait for Wednesday at 2pm eastern. Odds of a rate hike continue to fall and it is highly unlikely the Federal Reserve will hike on Wednesday. Today’s action started off well as stocks raced higher. It would not last as sellers began to get after the market pushing the market lower. Volume would not keep pace with Friday’ quadruple witching, but no Monday could keep pace with any option expiry Friday. Not the greatest start to the week, but it could have been much worse.
It will be tough for the market to move in either direction ahead of the Fed’s policy decision. For those who play the macro game will not want to take large bets until the know how the Fed will move. Trend followers simply do not care. Sure, if the Fed removes their support of higher equity prices we will adjust as price adjusts. No need to guess which way the market will move. As of now we are seeing signs this market will want to continue to push higher.
We are going to introduce something new to Big Wave Trading soon. Keep an eye out for updates. We will be tracking a live portfolio based on a complete quantitative system. Will be coming soon!
This market is just waiting on if the Fed will move rates or not. Perhaps the focus will turn to the Fed policy statement and whether or not hints regarding rate hikes in the near future. Odds certainly favor a hike in December. It will certainly depend on how the economy performs. We’ll have to continue to deal with traders focusing in on every job report.
Stay with the trend and have a great week!
