All About FOMC

Context: A rate hike is very unlikely at today's Fed policy meeting, but traders will be looking for hints of a move that could come later this year and the path for further rises in 2018. Janet Yellen will also hold a news conference after the FOMC announces its decision and is likely to reveal details on how the FED will wind down its $4.5T balance sheet.

/ES Value: YVAH 2505.50 YPOC 2504.50 YVAL 2503

/ES Plan: Yesterday SP500 future has tested previous record high at 2506, led by financial stocks ahead of FOMC meeting. Treasuries pulled back, pushing yields higher, as traders expect that FED starts the process of winding down the central bank balance sheet. ETH/RTH left bullish imbalance (PBT 2507). Overnight shows bullish profile, moving within yesterday's narrow value, so we've 2 options:

A) If the market moves above YVAL 2503 with internals positive, try to be a buyer leaning on 2503-2504.25 towards PBTs 2508-2510. Failure to take out ONH 2506 early is signal of weakness and major retracement.

B) If market moves below YVAL 2503 with internals negative, try to be a seller leaning on 2503-2501 towards LVNs 2497-2494. Failure to breakdown YVAL 2503 early is signal of a potential move back to ATH.

Tips: Today is a FOMC day so don't expect to much action until the scheduled time of the FOMC meeting announcement, then there is usually an initial big move in one direction followed of a classic 'Z' zig zag move to run weak stops. More details here on 'The FOMC Setup'

Today's Economic Calendar

10:00 AM Existing Home Sales
10:30 AM EIA Crude Inventories
02:00 PM FOMC Announcement
02:00 PM Chairman Press Conference

Disclaimer: All information on this outlook is for educational purposes only and is not intended to provide financial advice.

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