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!

Today’s Metrics

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.