Price Swings During FOMC a Thing of the Past

For many years in the past, FOMC afternoon meant wild price swings, big directional moves and potential profit$ flying all around. Traditionally speaking, it was rather common to make a week’s if not an entire month’s worth of profit between 2:15 and 4:15pm eastern time, once every six weeks.

But those days ended long ago. The historical uncertainty of what Fed decisions might be have been replaced with a literal certainty that no material policy change is imminent. So now it’s just another day, often a rather noisy one.

Something drilled the TF into powerdive mode this morning, which is not unusual during low volume stretches as recent. Meanwhile, the ES was completely unaffected while doing its best job to resist selling off as usual. In the end it succombed to a modest pullback for the day.

Traditionally speaking again, the Thursday session before non-farm payroll Friday is usually muted to stone-cold dead, five out of six times per year. In other words, roughly ten out of twelve Thursday sessions in front of the non-farm payroll Friday are subpar trading. Remaining two of twelve offer some type of active tapes all day.

Those are some fundamental basis traditions to keep in mind. Friday is the monthly non-farm payroll event, and today is the session before.

For more daily updates from Austin, visit his blog at Coiled Markets.