The first Fed Open Market Committee meeting since the Obama administration took office takes place today, and as of Tuesday's close the S&P 500 index futures closed at 839.20 for a 'large' 4.1% gain over the last five days. Such strength in advance of an FOMC meeting has been a bullish sign in the past, and overnight moves in the S&P futures complex would seem to bear this out. In overnight trading the S&Ps have traded into the lower 860s, which well surpasses the predicted move in this trading idea below, which could turn this from a long scenario to a short one.
Q: How has the S&P futures contract (CME.SP) performed in the past when it has seen a 'large' five-day gain as of the day before an FOMC meeting in the first quarter of the year?
A: According to the 11 previous occurrences of this event, EventEdge indicates that CME.SP has shown a strong bullish edge that peaks 13 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Tuesday, Jan. 27, 2009) is Friday, Feb. 13, 2009. CME.SP rallies in 91% of the cases (10 of 11) by an average of 2.1% relative to the close on the event date. The average of the one decline is 0.8%. The overall return of the 11 cases is 1.8%, which, based on the close of CME.SP on the event date (839.2), provides a target price of 854.31.
If you'd like to check this out further using our EventEdge analysis tool, click here
This is a redux story, meaning we published it last year on January 30th.
Gibbons Burke is editor of MarketHistory.com.
Related Ideas:
S&P Futures - FOMC Market Boost? - January 30, 2008
