Today the Fed will be wrapping up a two-day policy meeting and will announce its latest interest rate policy this afternoon. This is expected to remain unchanged, but what will change is that for the first time ever, the Federal Reserve will include an outlook on interest rates in its policy announcement. We should see the market react strongly intraday following the news with wider swings like we had seen in past years when rates were more subject to change.
The typical Fed reaction is usually in two sets of three reactionary waves on two time frames. The first is on the 1-2 minute time frames with an initial reaction, a secondary reaction, and then a third counter move. It is not uncommon to see the second reaction play out more strongly than the first. This entire set of three waves then creates the first wave of a larger set on the 5 minute time frame. This larger set is easier to trade, particularly the second and third waves, because by that time things have started to slow down a bit.
S&P 500 (Figure 2)