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Morning Brief: Fed Meeting and Volatility

Yesterday's market was one for the record books . The major indexes sold off heavy early in the trading day, dropping to just over 4% by mid morning. The VIX skyrocketed early, hitting over 38, rising 25%+. However, a very late afternoon rally came in, with Indexes scraping back losses, to actually print green, the first time in quite a while. However, the rally was short lived, as the Fed meeting looms today and tomorrow , and the NDX is already down over 2% in pre market, wiping away any support we might have formed yesterday. The major reason for the late rally, was dip buying from algos, as the market broke both the Bollinger band and the VWAP, breaking into new lows of the day, which tripped algos into buy mode.


All eyes are on the fed meetings today and tomorrow. Experts don't expect any new information to come in, and easing of monetary policy to continue. Also , they predict that interest rate hikes are still planned for later in the year, with no adjustments made to continue earlier. However, the market seems to be hesitant, as inflation continues to rise faster than predicted. The PMI print was also weak yesterday , which is also a signal that the Fed might have to adjust their hikes earlier than predicted.


I plan to continue to be nimble here, still selling covered calls and hedging indexes for my long term positions. Day and swing trading wise, I am just going to keep scalping, and I expect a similar pattern as yesterday, a sell off before and during the fed meetings, with a late pump, but a dump in the final hours of the trading day. However, we will see what forms and see what happens when major support/resistance points are triggered.

Please let me know via DM or email : if you have anything specific you would like to see in coming posts.

INSTAGRAM: day trading_traveler

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