Friday (4.24.09) had all the makings of “Fed Day”. Overall trade was quiet yet progressively positive as traders anxiously awaited the details from Fed regarding the banking system’s “stress-test” methodology. It was “buy the anticipation, sell the announcement”, followed by “buy the drop and sell the pop” type action. Program trading kicked in as price moved from fair-value to extreme discount up to extreme premium. In the end, the S&P closed near its high for the session.
Though we admit this type of volatility can be challenging to trade, we at Polaris Trading Group (PTG) follow a disciplined approach to trading. The above chart is our core Balance Chart which provides the trader with all the critical levels needed to make intelligent knowledgable trade decisions. The sub-graph labeled PTG Cycle Trend is our proprietary buy and sell filter. As you can see on the chart the Cycle Trend accurately identified profitable trade opportunities without getting whipsawed by the algorithmic programs.