March 22, 2005: Ledge on FOMC

After close analysis:

I stopped by room - it's been a while. Today was FOMC (raised rates by .25 as expected with worries about inflation) and boy what a day it was: Market bounced from oversold condition and also the breadth div over last couple of sessions. After FOMC announcement it just took a nosedive in 1 direction like falling off a ledge. There's no doubt that the market is in serious correction mode which kinda reminds me of 2001/02 with the scary double hump on NQ. What will I be watching for tomorrow? It's gotta be the 1160 and 605 levels on ES and AB respectively. There were couple of 6 bar b/o setups.

Observation(s) of the day: NQ gave nice clue again and signaled that morning's upmove was just a fake! (how many times did I see that).

Market breadth was +ve prior to FOMC announcement but tanked big time after the announcement. Vold, Add, and Addq are all with -ve xover.

Futures bounced in the morning. AB b/o'd its ema on a 6 bar b/o prior to FOMC but couldn't hold and broke down. Interestingly its 1st cnsld was below the emas which was a good spot to reshort and play continuation trade. NQ gave a nice clue that morning move was probably a fake, cuz it was weak all day and couldn't rally past yesterday's range and bumped against its ema. ES200R setup a nice ascending channel prior to FOMC which confirmed short setup after breaching its ema. ES, AB, and NQ are under their emas.

Indices same like futs and market breadth. Sox was stronger than Smh and bounced off its channel, but both bumped against their emas and fell like rest of market later on. Dow tried to b/o of a triangle but was below its ema and kinda hint it that morning upmove wasn't genuine.

Overall positive day!