I love you, Janet (especially your quarterly Q&A)

It's not (FOMC Chair) Janet Yellen, specifically. But the regular opportunity to trade around the very predictable market behaviors coming out of the quarterly Q&A that follows that month's FOMC policy decision. Many of the usual price action characteristics are magnified by the wider range created by the event.

If it's a knee-jerk reaction to news then it's weak-handed. This applies to econ reports, headlines, and FOMC Q&A sessions. So, when the market responded to Yellen's sentences by declining, each of those dips merely stretched the rubber band tighter. And when those weaker hands were done, the rubber band could snap back up.

Quoting my post from 3:18pm ET Wednesday:

This afternoon's FOMC policy statement was greeted by firming up to about 1991.00. It triggered a surge that extended quickly to almost 2008.00, exceeding my 2000.00 (+/-) target. A consolidation was testing 2000.00 when Yellen's Q&A began.

Talk about a cooler. The next half-hour retraced down to almost 1985.00, below the FOMC news.

But that's all weak-handed selling. Yellen's every sentence is a headline, generating a knee-jerk reaction. At some point, those players are done, and the pattern can resolve. That time should be arriving by now.

In fact, my 1991.25 buy signal is now being probed by 4 points in its first 3 minutes. Trading any higher any later would confirm new sponsorship had arrived. There is noise above, but the leg has potential back to 2009.50-2012.00 and through it.

Blog subscribers and prospective subscribers are welcome to access my Chartroom free for 1-2 weeks to help incorporate the terminology and approach more efficiently.

Posted to Rod David's Futures Market … on Dec 18, 2014 — 8:12 AM
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