Fed Update – 6/21/2021

Fed Update – 6/21/2021

S&P 500 24-Hour Index Futures - 2-hr Candles

The Fed sounded dovish (no apparent policy changes), and the market is unhappy so far. This is the misstep I worried about that would seem illogical at first blush. We like easy monetary policy, right? Unless inflation gets out of the box, which it has.

The price did not even seem to vacillate as usual. Instead, it just sold off right to the Gap area and Weekly Expected Move Low. The WEM Low and our downside target was 4189. The low so far is 4190.25. Ok, I missed it by 1.25 cents. Nobody is perfect.

Let’s see if anything is walked back in the news conference. The WEM low and the 21-day EMA are holding the market thus far, but the wedge is broken. Of course, anything is possible, but it is reasonable to conclude that the intermediate correction we expect is underway. The close will define where we sit, which depends on where the market stands.

Stay tuned – the next update will come after the close.

AF Thornton

Website: https://tradingarchimedes.com

A.F. "Arthur" Thornton is an expert in logic, risk/reward quantification, market fractals, pattern recognition and asset class behavioral analysis with 34 years devoted to developing algorithmic and quantitative trading systems. In addition to trading his own capital, Mr. Thornton designs custom algorithmic and quantitative trading systems for a small and exclusive group of exceptionally qualified traders.

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