No pop, market flopped, we stopped

Well the market was not able to muster any bid like we had hoped for. We stopped out of our long-side QQQQ trade into the closing strength. Volume was very light and breadth was negative. Even BIDU had its first down day of its little life as a publicly traded company after making all time highs.

Tomorrow is the FOMC meeting which should keep the market locked in a sideways pattern until 2:15pm EST. The pop we were hoping for today might materialize tomorrow after the Federal Reserve speaks. Traders are looking for any indication of a pause in rate increases.

Much of the recent economic data points have pointed to growth with relatively benign inflation. We believe that there has not been enough evidence for the Federal Reserve to alter its path in either direction. However, one more rate increase is one less to go on its trek to theoretical neutrality, somewhere between Fed Funds Rate 3.5% and 4.5%. Be aware that plenty economists think neutrality is a state of fiction. This is what makes interest rate forecasting so difficult.

If You Held A Taser To Our Head: All in all we are expecting a relief rally that should not have legs. We would attempt to play such a bounce with tight stops as was our unsuccessful strategy today. We expect the Fed to raise .25% and stay on course with its language. An inline Fed should be enough to spark the relief bounce. We will provide more detailed analysis after the release.

-Hope you traded well-

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