A wild and wacky day, for sure. Traders are supposed to love volatility, but who among them could have captured the dollar opportunity in Wednesday’s fearsome machine-driven swings after the Fed announced what everyone on earth had expected. The initial feint was lower, and it suggests that traders were at first disappointed that the Fed had not eased by 50 basis points rather than 25. But by day’s end they seem to have figured out that a ‘mere’ 25 basis points was no cause for despair, especially since they can be certain more easing is coming. For now, use the 3042.25 target shown as a minimum upside objective. You can also use a pullback from our ‘sweet spot’ to initiate a mechanical buy at the green line. If you catch a ride, use a piece of your profits to cushion a tight stop-loss for a short from D=3042.25. ______ UPDATE (Sep 19, 5:20 p.m.): A pullback to the green line at 2996.00 (see inset) would trigger a mechanical buy, stop 2980.50. Initial risk is $775 per contract, so this one may not be for everyone. It will work best if the bid is hit overnight Thursday or early in Friday’s session. _______ UPDATE (Sep 20, 8:32 a.m.): The pullback to the green line (2996.00) occurred at 4 a.m. and produced a profit of as much as $1400 by noon, when the subsequent rally topped at 3024.50. The 3042.25 target of the same pattern will remain valid unless C=2980.75 is breached to the downside. Several subscribers reported having done the trade.
ESZ19 – December E-Mini S&P (Last:3007.50)