09.18.13 Fed Day

The FOMC announcement at 2:00 p.m. ET for the September 17-18 FOMC policy meeting is expected to leave policy rates unchanged but focus on whether bond purchases will be cut back sooner or later and how fast. Also, the Fed will release its quarterly forecasts before the chairman’s press conference, generally about 2:00 p.m. ET with the statement.

FOMC Consensus Forecast for 9/18/13 policy vote on fed funds target range: unchanged at a range of zero to 0.25 percent

For expectations of Fed taper, the Econoday survey panel has a median forecast for a $10 billion reduction to $75 billion from the current level of QE purchases of $85 billion monthly. The low forecast for QE purchases is $70 billion ($15 billion reduction) and the high is $85 billion (no taper at the September meeting).

Prices held our anticipated 1688 support level and as expected the bulls did indeed get emboldened as prices rose with solid underlying bid, settling ES mini’s at highs of session.

Today is Fed Day, so expectations are high that QE “taper” will have minimal impact on financial markets, hence the bullish sentiment.

IF price action can hold above PDH 1699.25, THEN upside surge could carry 1705 – 08 zone. Failure to sustain trade above this level calls for pullback 1693.75 – 95.50 zone with further downside targeting 1688 – 90 if supports are violated. Trade below PDL calls for 1681 – 85 zone to be tested.

There is a wide array of price levels and range today, but since it’s Fed Day, potential always remains for having wide price swings depending on markets reception of Fed’s decision.

Stay focused and disciplined.

Good Trading…David

Habitude Eleven
I am courageous and I always act, even in the face of uncertainty and possible loss. Do not say, no fear. Feel the fear and act anyway. I may be frightened, but I still saddle up. I am not reckless. I act promptly in accordance with my methodology. I respect my calculations. I have a healthy respect and I balance that respect with my courage. I am an explorer. I am on a hero’s journey.


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