Kevin: The pattern is always the same: An initial reaction, a counter-action, and then a followthru of the first reaction. The initial move always foretells the ultimate direction of the post-Fed market.
The problem is, deciphering what constitutes the "initial move". I usually screw it up and bet wrong. Like today, at 2:15 the market moved higher for four minutes, then dropped hard for seven minutes, then corrected back upward for about 15 minutes. Looked to me like the pattern was Up-Down-Up.
On the other hand, the announcement was actually released at 2:14 or slightly earlier, and the markets initially dropped for a couple of minutes until 2:15. So was that the first move?
Or, do we ignore the first five minutes of inevitable whipsawing and look for the first "sustained" move of x minutes or x points and call that the initial reaction?
Hell, I remember once when we initially moved up and then tanked into the close. What? Well, the followthru to the upside came the next day, in a big way.
So, the pattern is always the same, but damned if I can ever figure it out in time not to get run over by it. |
