Free stock pick for 01/26/2011
Dear traders
Reminder: Today is a Fed Day!
In the past this usually brought upside in the morning. Instead, pretty much anything goes for the morning and today is likely to be a slow one given the lead-up into it. Volume usually drops off dramatically heading into mid-day and trading at this time becomes very risky. At times we will see a bit of activity ahead of the Fed.
More often than not, when this happens, it is to the downside.
As the Fed announcement nears, look to close down extra market minders and level II screens to avoid system lock from the surge in volume following the announcement. Trading at this time is high risk due to data delays and rapid price movement.
Three waves of activity tend to follow a Fed announcement. There is an initial reactionary move, followed by a correction. This correction can be stronger than the initial reaction. A third wave follows, heading back in the initial post-announcement direction.
Please use smaller risk then usual on swing setups.
Wish you all great trading day!
Ivica Juracic
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If you have any questions, please feel free to contact me.
Good luck trading today!
Ivica Juracic
XpertStockTrader.com
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