Joined Dec 4, 2012
319 Blog Posts

Scenario #2 Played Out


Yesterday it was noted there is a very specific pattern for FOMC Announcement Days over the last 20 years.  A picture was painted of three scenarios and Scenario 2 played out.

Scenario 2 is if SPY is lower for the day and if we continue to trade lower post the FOMC, then expect an up Thursday. This was a bit sloppy but that was what we got.

Wednesday saw SPY open at $189.58 and then trade up to a peak of $191.56 before coming back to $190.32 at 2:00 with the FOMC Announcement. From there it traded to a close of $188.12. Today we closed at $189.13 effectively higher by a $1.

That said it was a struggle with eight programs that drove stocks higher or lower through the course of the day. Each one lasted an hour.

The low last week was $181.02 so we are higher by $8.11 or 4.48%. This is sloppy trading but you need to be thinking ahead to capture gains.

4.48% in 6 trading days is pretty amazing the problem is that few if any capitalized  on this move.

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One comment

  1. boyaj

    So are you saying that because there was no reversal, per your pattern recognition, that today should’ve been an up day? I’m not trolling or anything, but in your prior post, you talked about reversal around 3:00 and then a follow through until the end of Thursday.

    What my question essentially is asking is that how did you surmise that we would have an “up” day today even though there really wasn’t a reversal yesterday, with the assumption that your observation was solely based on a reversal?

    Hope this question makes sense, and really enjoying your posts!

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