2:59 pm EDT:  The Announcement was released at 2:16 pm, whereupon the ES traded down 2.5 points to 1108.50, retraced most of that, then continued down again.  All in all, the most tepid response we’ve seen since the June 09 Announcement.  The ES looks like it’s finding support just above the upper end of today’s value range of 1105.25; however, longs are aggressive because of the statistically bearish bias to this time of day after an FOMC Announcement.  Were we to be long, 1104.00 is a good stop.  If it breaks, there is a small but real chance of a selloff down to the weekly pivot of 1096.50.

11:02 am EDT:  Not much to write about.  The 1107.50 level was breached by two ticks prior to the open, then there was a minor move up to yesterday’s overnight high of 1111.00.  No reason yet to expect any major deviations from the typical FOMC day profile.  The last four or five announcements have been several minutes late (past 2:15 pm).  Also, in the first 45 minutes, there’s usually a three wave structure with a quick initial impulse, a retracement, then continuation in the original direction.  With the low volatility lately, it’s possible the move will be small.  However, consolidation of the leaders suggests otherwise.

The Precise Take – ES strong ahead of FOMC Announcement

Leaders Analysis:   The EuroYen has been consolidating just under its 50 day moving average and a break through it would indicate some of the global concerns are easing (equities bullish).  The US Dollar is down a bit overnight, and equities have responded accordingly.  30 Year T-Bond futures are holding support and consolidating, so we’ll watch them closely today.

Medium Term Analysis:    After the FOMC Announcement today, the focus will be on options expiration this Friday, which also features the termination of the Sep 09 equity index futures contracts (quadruple witching).  The scheduled news has generally been improving, so we see no major obstacles to the bulls in the weeks ahead; however, the deteriorating situations in Greece, Spain, Ireland, etc. could weigh on the markets.  If things get too bad, an EU or member state bailout is a strong possibility.  Accordingly, should a correction develop in the next week or two, it could be suddenly reversed with a short covering rally to follow.

Trading Today:  It is pretty well known that FOMC day has a bullish edge.  On page 2 are two Time Profiles that show the net points for each 15 minute period throughout historical FOMC days.  The first 15 minute period also contains the overnight gap, if any.  CPI was a non-event this morning, so the ES should gap open by about 4 points.  Weekly R1 at 1112.75 has been a major obstacle this week and, with day-session-only R2 just above at 1113.75, this is today’s major resistance area, which should hold before…

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