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FOMC minutes -- $2380 profit!
How's your first trading day? Not bad for me. I just made $2380 trading the NQ ( Emini Nasdaq 100 futures). It was virtually a riskless trade. I timed my trade just after the release for the December FOMC minutes at 1400. Why did the market go up?
You don't need to know exactly why the market go up. Usually market reaction to FOMC minutes is limited. But today, there's a HUGE spike. I hope you were able to grab this opportunity and make some hard cold profits.
Technically:
NQ was already trading near the Moving averages before the FOMC minutes. The moving averages were also flat. This is a pre-warning signal that NQ is gearing up for a big move. Nobody is asking to you start buying or shorting immediately, wait! I waited for around 3 minutes after the announcement before buying 1 lot. Upward momentum was apparently unstoppable and I added 4 more lots 2 minutes later. ( refer to 5 minute Candlestick Chart above). When it hit the resistance line 1694.5, I was almost ready to take profit but at the same time I was hoping for some more upward potential. I decided to wait and was ready to exit on the first sign of weakness. Momentum appeared to slow and I exited all 5 lots. My profit was $2380. Not really that fantastic ( My highest record was $5320 in a single trade), but I was satisfied, afterall this is a good start for the first trading day.
Here's the fundamentals:
Well, according to analysts, the minutes reinforced perceptions that the Fed's tightening policy may be near an end.
According to the minutes:
“some further measured policy firming is likely to be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance.”
Measured might be interpreted as a steady 25 basis point tightening in recent context. While the minutes should not be interpreted as a signal that the tightening cycle has run its course, they do seem to reinforce the belief that policy is now comfortably in the neutral zone which is good for the market.