Fed expected to raise rates as U.S. economy flexes muscle
The Federal Reserve is expected to raise interest rates for the second time in three months on Wednesday, encouraged by strong monthly job gains and confidence that inflation is finally rising to its target.
A rate hike at the conclusion of the Fed’s latest two-day policy meeting is already baked into bond yields and financial markets overall, with investors putting the likelihood of such a move at 95 percent, according to CME Group’s FedWatch program.
Opinion: What suddenly lit a fire under the Fed? The bubbly market?
It was with a palpable sense of urgency that Federal Reserve officials took to the airwaves two weeks ago to make their intentions crystal clear.
Everyone from Fed Chairwoman Janet Yellen to Vice Chairman Stanley Fischer to New York Fed President Bill Dudley to the normally dovish Gov. Lael Brainard all but pre-announced an increase in its benchmark rate, to be formalized at the conclusion of its meeting on Wednesday.
Fed to Hike But Avoid Signaling Faster Pace: Decision-Day Guide
Federal Reserve officials are widely expected to announce an interest-rate increase this week amid buoyancy in the stock market and indications the U.S. economy continues to grow steadily, without signaling they anticipate accelerating their pace of policy tightening.
Beyond the expected announcement Wednesday of a quarter-point hike in the U.S. central bank’s benchmark rate target, to a range of 0.75 percent to 1 percent, investors will be looking for whether policy makers change their forecasts for the rest of 2017 and beyond.
Today’s Trading Lesson…
Order flow isn’t a term you will hear on CNBC or read in the Wall St Journal…
== >> It’s an underground secret, exposed only to those in contact with big money. When tens of millions of shares are involved, order flow is not going to be announced on TV.
That is unless they want you to buy shares they need to sell, or, they want to accumulate (buy) a few million shares and need you to sell to get the shares.
How do they do that? It’s simple. It’s done with a specific type of price action…
What attracts the attention of retail investors? Higher prices. More specifically, fast-moving higher prices. Said through the lens of technical analysis, higher prices with wide fluctuations after a significant move higher.
The “fluctuations” part is what makes the retail buyer think he has a second chance at a better price.
So we are clear, a “sloppy/whippy” topping pattern (after a mark up/up trend), is when institutions are marketing stock for sale. They are telling you they need to get out, and they are attracting you like moths to a street light with price action.
On the Tape Today | 3-15-17
BA | Boeing traded into a swing low yesterday, a day after a perfect bullish u-turn. Solid order flow sets up a $179.50 buy-stop with a target to sell @ $184. Stop loss triggers on a close below $178. If the stock market bounces the next 2 days with increased volume, I will consider expanding my target.
TGT Target Corp. showing a clean bearish pause after a momentum move. $55 repeats as the support to watch. This level has held dating back to May 2012. Yet the stock price tested the bulls again yesterday. Looking for a fuel candlestick to finally penetrate the support and drive a new swing trade short sale into the $48 support. No entry yet, but a must for your tracking journal.
Tape Reading the SPY ETF
$SPY price action trades into a tight range (as expected) prior to the FOMC interest rate announcement today.
Despite the major indices winding into a consolidation there seems to be some interesting trades setting up in healthcare (UNH), biotech (CELG) and oil/gas. The oil & gas ideas have solid bearish order flow, but a few need to break support (XOM) for the next leg lower.
The IWM (Russell 2000 ETF) decline the last ten days provides something to watch. It’s currently in the $134-138 trading range, but should the stock price fall below that support, bearish volatility could pick up
Something to keep in your trading journal so you have a game plan for this scenario.
Stock Market Today: Heatmap of the S&P 500
Stocks to Trade 3-15-17 | Wednesday Edition
Bullish Momentum: MOMO, CLVS
Bearish Momentum: ual, fnsr, oke, luv, ions, aal, mnk, alxn, hal
Long-Term Order Flow
Bullish Order Flow: MOMO, RH, WYNN, CELG, INCY, BA, FB, SWKS, AMGN, UNH, AVGO
Bearish Order Flow: CLR, TRIP, MNK, ALXN, SM, FSLR, RRC, PRGO, EQT, TGT, NFX, SLB, OXY, APA, LB, DKS
2X Normal Volume: MBLY, UAL, FNSR, MOMO, CLVS, CTXS, CLR
Inside Days: mrk, baba, aig, nflx, yhoo, pep, jci, hrb, vlo, ups, fslr, mcd, kate, hlt, tso, lrcx, ndaq, pcln
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