Muted U.S. Equities Open In Anticipation Of FED
Shain Vernier • 2 min read
The markets are sleepy this morning, with most traders apprehensive ahead of the FED’s big announcement this afternoon. U.S. equities have opened flat with the DJIA and S&P 500 futures posting moderate gains.
Nap Time Ends Abruptly At 2:00 PM EST-Don’t Be Late!
Tight ranges have dominated the session trade of several asset classes:
December gold futures 67 ticks
November WTI crude futures 53 ticks
December E-mini S&P 500 futures 20 ticks
EUR/USD 35 pips
Range bound markets test our discipline and risk management. Often, technical strategies prove ineffective, producing low percentage trading signals. Sometimes you just have to dig in and wait for the action!
Ahead of today’s FED decision, there have been a couple of U.S. real estate data releases:
Event Previous Projected Actual
MBA Mortgage Applications 9.9% NA -9.7%
Existing Home Sales 5.44M 5.46M 5.35M
This month’s U.S. construction/real estate metrics have been a mixed bag. On one hand, starts and permits are up. On the other, sales and mortgages are down. This incongruity illustrates a divide between the lending and construction sectors. In my opinion, it is due to lenders waiting to see what this Fall’s FOMC season brings.
Overview: Today’s session is going to answer many questions moving forward. If you are going to engage the markets during today’s U.S. session, keep a close eye on risk.
News items of this magnitude stimulate participation. Irrational price action can result as algo, high frequency, and momentum traders pile on. In these types of markets, there is nothing wrong with taking a cautious approach.