Wednesday, November 02, 2011

I forgot all about the FOMC statement today, normally I post the same thing I have for years, that being that we get a three wave move off of FOMC releases. We get the initial move, then a counter move, and then the last move goes back in the direction of the initial move. ANYWAY, since the FED has boxed themselves in, and NOTHING changes in the statement, udder dan dey are going to hold interest rates at ZERO until gasoline prices hit $20 a gallon, the moves have been pretty muted, and pretty much worthless, for the last few years.
The move into the release this morning was pretty interesting, the red line points to the FOMC release bar, but the red BOX outlines one of my all time favorite short patterns, it's the infamous AVALANCHE set up. The move starts with a drop below the 20 MA, which it got, then we wallow back up two or three bar's back UNDER that 20MA, the short trigger is then when price declines under the open of the prior bar, with your stop over the 20MA, in my case I use a 21MA, but only because I'm a FIB freak. Obviously, you have to use your common sense on this, I mean, you wouldn't want to be doing any thing directly ahead of a release like that, and you can see even though the pattern works, they whip sawed it up above the MA before completing the bar to the down side, PLUS, we had no follow through what so ever on the next bar, typical bull crud, wad ever, I just wanted to mention one of my favorite patterns.

This is how it played out over the next few bars, very sloppy, and hardly much of a move at all, we, USED, to get some BIG moves out of this, especially when they were actually doing things like, GASP, RAISING, interest rates. You know, there was to much whip around and crap, but the one thing I notice is that we never CLOSED above that MA, so it actually worked, if you had the balls to live through the whip saws at least.


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