Time to make money! Trading before the FOMC meeting!

12 December 2022 95
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On December 14 at 7 pm GMT, a regular meeting of the Federal Open Market Committee of the US Federal Reserve System (FOMC) will take place.

 

Studies of US stocks and indicesoil and gasprecious metals and US Dollar price movement before FOMC meetings reveal the benefit of FOMC “drift” effect predictions. 

It showed that US indices (S&P 500 and DJIA), most of considered US stocks, Oil (BrentWTI), Gas and Metals (especially Silver) are prone to grow 24 hours before the Federal Open Market Committee (FOMC) meetings. Moreover, stronger growth of US stocks and indices is observed 36 hours before FOMC meetings. The dollar, on the contrary, the US is declining on the eve of meetings.

 


The following can be considered as trading instruments:

 

* the S&P 500 and DJIA indices,

* stocks of the U.S. companies that have shown the highest average profit per tradetotal profitability and acceptable drawdown of no more than 20%, such as AppleAmerican ExpressVisa and JP Morgan,

WTI Crude Oil and Natural gas,

Silver,

* the EURUSDGBPUSD, and USDCHF pairs.


 

Today we will focus on Silver.


At the moment, the metal is trading above the $23.5 mark.

The comments of officials about the slowdown of interest rate hikes by the US Federal Reserve put pressure on the US dollar and support precious metals, including Silver. Investors' expectations of a Fed rate hike of 50 bps instead of 75 bps on December 14 play into the hands of silver.

In addition, the CFTC Silver speculative net positions rose on Friday, signaling the optimistic mood of the bulls regarding the metal.



So, the options for entering and exiting the market:

 

Buying Silver on December 13 at 7 pm GMT.

Deal closing:

Take Profit 1 = 24, Take Profit 2 = 24.5.

* Either exiting the market on December 14 at 6:59 pm GMT.

* Or exiting the market on December 15 at 2:59 am GMT.

 

We place a protective Stop Loss order below the low of the previous trading day, that is, December 12.

 


Remember the spread and money management rules!

 


Risk warning!

Trading in financial markets implies high levels of risk and may result in a loss of investment capital. The MarketCheese team is not responsible for the possible loss of your investment funds. 

This content is for informational purposes only and is not intended to be investing advice.

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