Yesterday was a quiet session, as each of the major indices closed near unchanged levels and volume dropped to its lowest levels since Friday, July 2, before a pre-holiday weekend. The broad market spent the entire day trading in a very narrow, sideways range near the bottom of the previous day’s range. This enabled the S&P 500 Index to closed 0.1% higher, the Nasdaq Composite 0.1% lower, and the Dow Jones Industrial Average flat. Volume in the NYSE was 29% lighter than the previous day, while volume in the Nasdaq declined by 26%. Given the lack of volume, it was not surprising that nothing really happened in the broad market yesterday.
It would probably be useless to place much credence on yesterday’s price action because it was a pre-Fed day, which are typically quiet. Today, the FOMC meets to discuss federal monetary policy and will announce their decision on interest rates at 2:15 pm EST. Most economists believe the Feds will raise interest rates by a quarter point, but there is speculation on whether or not last Friday’s weak employment report will affect the Feds’ decision. Either way, remember it is NOT the actual news that matters, but rather how the market REACTS that is the important thing. Because the broad market has sold off so sharply during the past six weeks, a relief rally would not be surprising, even if the Feds do raise rates. But, many investors and large institutional traders typically stay on the sidelines ahead of these Fed meetings, so we expect the first half of today’s session to be quiet just like yesterday.
From a technical point of view, not much has changed since yesterday’s detailed analysis, so we’ll keep today’s newsletter short and will re-assess the technical picture after we see how the market reacts to the FOMC interest rate decision later today.
Today’s watch list:
Due to the FOMC meeting on interest rates, there are no new trade setups for today. However, we will re-assess tomorrow.
Daily Reality Report:
Below is Morpheus Trading Group’s daily
performance report of closed trades and an update on all open positions from The
Wagner Daily (Intraday Real-Time Room trades are reported separately in The
Wagner Weekly). Net P/L figures are based on the quantity of shares represented
in the MTG Position Sizing Model.
We are presently flat the ETFs.
Edited by Deron Wagner,
MTG Founder and