We have the 2 day FOMC meeting and the end result is
- We didn’t make it pass the 50 day EMA. It is very obvious that is the resistance there
- The bearish flag formation made by the 2 red lines still continues to form. This formation typically resolves to the down side.
Where do we go from here?
- Negative price sentiments take us straight down to new lows immediately (dark red arrow)
- Market continues their indecision and gyrates but eventually resolves to the downside (light blue arrow)
- The formation gets invalidated entirely with a break up (green arrow)
I would probably be a bigger buyer at higher prices when (3) occurs. I would probably be nibbling some dividend stocks if (2) continues to play out to see if it brings me to November’s ex dividend period.
(1) is a queue to lighten up on some plays I got in (2) that might able to collect in lower prices.
Notice tat it is important to have a plan should market move in any direction. It reduces the impulsive decisions we all make when the counter trends occur.