Something Doesnt Fit

OCT 29   FED DAY    Yes, I’ll admit it! 

1. I saw many charts that are set up rather nicely the DAY of the FED mtg

2. It DOSNT FIT what I usually see on  what is known as  a messy, indecisive & volatile FED DAY

3. But That was a stretch using that title just so I could use this picture of the Trooper Dog.  I just think this pic is great

Starting with the Markets-  SPX    click here – click ‘download’ then click ‘open’  (when you hear audio, return here and follow charts)

Look at IWM  (And many mid cap and Micro s look to be ‘setting up”

$TRAN before yesterday –  Its higher now

 $TRAN NOW

$TRAN breaks to new highs and the QQQ is right at Highs and the IWC had an impressive day yesterday …. BUT CAN WE TRUST IT?   Well, I was mostly in cash at the start of this week, knowing that we are going into the FED WEDNESDAY, but  I started seeing ,not just one or two tempting set ups, but sectors of stocks setting up properly.    MANY of those stocks setting up began breaking higher, so I took a few trades.  That doesnt mean that I am comfortable holding them into 2 P.M. Fed time. I may hold ‘something’ that I am up nicely on, but I hate to give back gains too.

These are just ideas of what I was looking at , and trust me there are MANY MANY More. After the initial Steep sell off & then the Short covering Rally that follows  (Like I mentioned in my “Energy” article)…You  will get your first pullback or sideways move.  You look for a higher low and divergenece and signs of strength to identify tht a 2nd leg up may be starting. Some “Set up” & look ready to break out, but going into this afternoon, The Risk of getting WHIP-SAWED is GREAT. If you are listening to the audio, I will explain in the summary.

These were some Good looking SET UPs

Along with WLT -See also ANR, ACI.…so BTU looks to possibly be “Next”. It has the same set up

These are “Interesting” set ups and just a variety of sectors to show whats out there.

XRA  (A Miner) and RIC and a few others have  been stealthily rising 

Which leads to GDX   (I have been discussing the POSSIBILITY here for a couple of weeks.  A Bottom similar to last December.

I also showed MXWL and mentioned “earnings” were coming out, but I liked the set up.  It SOLD OFF for one day, and reversed yesterday …

again looking great   (so far)

SO for now I just wanted to point out something that doesn’t quite fit…Bullish set ups across the board on the Day of the FED MTG.  Is it just setting up to react higher because most feel they know what is about to be disclosed? Possibly.  If you have traded for a few years, then you already know what 2 P.M. Eastern time to 4 P.M. can be like, and often it ollows through into Thursday Morning too.      For newer ones, the INITIAL KNEE JERK REACTION can be (not always, but often) HUGE.  It can also be a false move. So picture that at 2:15 you see GOLD  (for Example, it can happen in any sector)   shoot up from down $3 to up $10, Straight Up!!     Then people jump into Miners and GOLD and it suddenly sells off from 3 p.m. to 3:30 and goes red.  Panic ensues and message boards light up with  “THEY SUCKED US IN AND NOW ITS GOING TO CRASH…SELL!”  and everyone bails out with a few losses.  Then from 3:30 to the close it starts rising again ???   WHAT?  , but no one believes it this time, and licking their wounds, they watch it run away with $Gold back up $15.

Thursday Morning,  WHO KNOWS???    No one trusts any positions they own and turning to the message boards,  you read all kinds of theory and even some “Know It Alls”  that will tell you confidently  EXACTLY what is going to happen and why.  Sometimes they even claim to have a “GUY THAT KNOWS A GUY “ and he said….    (UUUGH, Please just ignore THAT guy).   Only time will tell and sometimes, if you know what to look for,  you’ll see it in your charts!

Best wishes on Fed Day

~ALEX