Today on the Marketbeat: 900 pt Rally Before the FOMC...The Monster Truck comes early

Market #'s @ Close:

DOW: +891 (10.9%)

S&P: +91.5

NASDAQ: +143

RUS2K: +35

TSX/S&P: +614

VIX: -13.6

Internals:

Core Sector List: 16/0 To the Bulls (1/2 up 10% or more)

NYSE

BREADTH: 18/1 Positive

A/D LINE: +1300

TRIN: 0.3

NASDAQ

BREADTH: 7/1 Positive

A/D LINE: +1200

TRIN:

Chart of Todays Price Action on the ES (S&P500 Futures) [Click to enlarge)

(Notice how the break of the days high sparked off the rally, which then took a 15min break and form a pennant which broke out with alot of strength to the upside.)

Wow, is one word that could sum up todays intra-day Market activity. Prior to 2pm est, the YM and ES futures were channeling around between pivots like has been the norm for the past couple days. However, with the looming FOMC anouncement, due sometime tomorrow, the market reacted to somethign today around 2pm, and this reaction was one that the lonely bulls have been waiting for. Post 2pm est, the Market moved nearly 500 YM points, and 55 ES points. With the internals agreeing with this move fully, could this be a start to the bottom. As educated traders, we do take this day with a grain of salt, and are not ready to call it the bottom, but we will digest this strength accordingly, like I mentioned yesterday with a close above 2 on the NYSE trin, we had a 80% chance of seeing a rally day today, although I dont think anyone could have predicted it would be as strong as it was today.

Under the hood like I mentioned the Internals were screaming bullish action today. We saw an early gap up from last nights market action overseas. This could have been a foresight into todays big rally. The Trin trended downwards for most of the day, minus when the gap filled before the rally sparked off aroudn 2pm. After 1:45 on the Trin it trended lower than Bushes approval rating. The A/D Lines tacked on some solid gains while the Breadthes closed at 18/1 Positive (NYSE) and 7/1 Positive (NASDAQ)

Starting From Scratch:

As we discussed yesterday in how to prepare for an FOMC anouncement and use it to your advantage to steer clear from added volatility and risk. Today I will continue this discussion as the FOMC meeting anouncement is due sometime tomorrow around 2pm, I will try to have a live update on the situation while it unfolds, but I suggest you stick with a live feed like the shadow trader or at worst CNBC. Once the news hits the wire, I feel a good practice for any new to these anouncements is to set up a chart of the DIA / SPY or /YM & /ES  and watch how the price action unfolds in relations to what is said, and how it is said. Ive done this for the most part of the last 2 yrs durign these meetings and its always interestign to see the big spike of initial action followed by a calming of the markets as it has digested all of it then priced it in. 

Remember, FOMC anouncement WEDNESDAY 2PM, make sure you adjust your parameters accordingly because as we saw today, it could be a wild wild ride. 

COMING SOON: CURRENCY !!!