Wednesday”s 17-point FOMC reaction wasn”t

Wednesday”s 17-point FOMC reaction wasn”t an anomaly. It was unusually large, yes. But it was structurally normal. Normal, for trending above a bias-up signal that had failed to trigger. Whether 17 points, or 7 ticks, its no-bias trending required being retraced entirely. And it was.

That brief 35-point round trip was followed by a 9-point bounce that also retraced entirely. But it had retraced only partially by the cash session close, let alone within 3 minutes of the cash session close when price action starts becoming less relevant.

That difference is important because the WedEX (Wednesday Option Expiration) signal relies on the closing price. And closing above or below recent sessions” lows makes a difference, especially after the FOMC reaction”s surge probed above those same sessions” highs.

Gapping open Thursday beyond either end of Wednesday”s intraday 2066.50-2093.50 range would serve by proxy to better define the WedEX signal. Otherwise, a bullish bias is slightly likelier on Friday afternoon and Monday morning.

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