FOMC day

Today opened weak, with a doji bar at the ema. Given the strong move late into yesterday, there was some chance of a second leg down. However, b1 had false breakouts on both sides and gave a first reversal signal with micro-wedge (mW) on b5. This was probably the best trade of the AM.

The next pullback was a mW to the ema ending in a down up signal bar on b21. This was good for a scalp. Although this did eventually give +2, anyone who had a swing stop probably exited when the market went against them the second time on b33.

There usually is an overshoot for a tight trading range (TTR) to reverse. A rising TTR is usually a wedge, and the FOMC announcement triggered an overshoot of the Trend Channel Line (TCL) on b58.

b62 was a very strong signal (A2, W1P, BP of ema) and everyone took it. The breakeven stop did not get hit and the trade could be held till the overshoot/climax of b74.

By all counts, today's FOMC action was tame at least for the first bar on news. The TTR made breakout trading of the FOMC announcement impractical since there wasn't sufficient energy in the market. A TTR breakout usually fails, so it would be a bad idea to breakout trade the Fed.

Repeated selling late in the day is usually a bad sign for the price and this may mean some down days in the near future.