How To Play The FOMC Announcement From 2:00 Today Through Thursday

I have observed a very specific pattern for FOMC Announcement Days over the last 20 years. Come 2:00 a trend that lasts from 2:00 until around 3:00 and then reverses typically follows through into the end of Thursday trading.

So as an example, SPY trades lower from 2:00 to 3:00 moving from 189 to 187 and then reverses to close at 189.50. Thursday should see more follow through to the upside. This is Scenario 1.

Today we are lower and if we continue to trade lower post the FOMC, then expect an up Thursday. This is Scenario 2.

The worst case would be a lower day that rights itself by mid day and trades higher post the FOMC, then expect a down Thursday. This is Scenario 3.

Therefore, the best scenarios IMO are 1 and 2. We will look back at how this played out on Thursday after the close.