Stock pick for 03/13/2012
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.
When the news hits we then tend to see three strong moves in reaction to the news. First the trio appears on a 1 minute time frame and then repeats on a larger one, typically the 5 minute time frame. It is very dangerous to trade in the immediate aftermath of the Fed announcement due to the rapid data stream. Proceed with caution at that time!
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.
From watch list what I sent today you can see that I will be more focused on intraday (day trade) setups. To see faster info you can join us and for that you can use this week action with 30% discount (only $69.95 for full service access) and I invite you all to use that opportunity. For any question feel free to email me ivica@xpertstocktrader.com
Wish you all great trading day!
Ivica Juracic
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