Loading ...On Tuesday, the market positioned itself slightly higher ahead of “the big day”. When we say positioned, we mean positioned. Trading volume was light and after a significant move higher in the morning, the market stagnated to the end of the day. The light volume reflected a deer caught in the headlight ahead of Wednesday’s highly-anticipated announcement from the FOMC.
Today is the big day! The market learns if the Fed has decided to begin curtailing its asset purchase program and if so by how much. The telegraphed QE move from the Fed to the market hints yes and it is around 15 billion. (FYI, no big market moving news is dropped by surprise anymore unless it is good news). What the market does not know is how it itself will react. At Alphas Edge, on events like Today, we sit on the sideline all cash. Instead of trying to guess what the Fed will actually do, we react to the reaction.
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