Risk/reward to the downside is larger than to the upside ahead of the FED decision. Here is a short setup with a risk/reward ratio of eight:
Short entry: 2070 Stop loss: 2088
Target:1 2033 Target 2: 1925
Quote:
FED At 2 p.m. ET the Federal Reserve will announce its October 2015 interest rate decision. Markets are pricing in just a 4 percent chance of a rate move today. All of the attention will be on the accompanying statement, and whether the central bank decides to keep a December rate move open as an option.
Chinese stocks slump China's Shanghai Composite Index dropped 1.7 percent overnight and the Hang Seng China Enterprises Index in Hong Kong dropped 1.5 percent, its largest fall in a month, as third-quarter earnings disappoint. Sixty-nine percent of Shanghai-listed companies that have reported third-quarter results so far have missed analyst estimates, putting pressure on stock valuations.
Here is the price action of this day. First a stop hunt below 2070 (the expected part), followed by a fast short squeeze and stop hunt up to 2091.9 (the unexpected part).
TerenceTam
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Time to drop rubbish indicators whose give you fault signal to make wrong decision.
Bear trend divergence can be occur 1-3 times before the Real pivot come. That's hurt to you.
I live in Hong Kong, and I can tell you Each month before end,
major player of stock exchange market switch their hold into next month.
If Next month go along bullish, it drop go sideways half day to 2 days and make more profit in next month.
3 days before, I give comment it bull to 2093~2126 in 4-6 days, just 2091 day high but NOT yet end for the Pivot comes.
most likely reach 2126+ in 1-3 days more.
ChartArt
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There is nothing rubbish about this indicator. If Wall Street wants to trade against the trend in order to make more profit, they can simply do it.
After the last FOMC meeting with unchanged FED rate the trend was down. So Wall Street wanted to do the opposite of what everyone expected and hence they destroyed all who shorted it this time ... At least my recommendation was to short 2070 and the price fell at least down to 2062.4
TerenceTam
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Take a look on above link, my NEW indicator EMA_MUSIC_STAVE_BY_COWBEARCAR, Fisher or even classic BB with DMI together.
They still give you RIGHT bullish signal.
I have test out 2000+ indicators and drop those give fault signals if possible.
Why Touch 2062? This is EMA7 of the day. Read my indicator post and you will know the reason.
If you really want the reason, the answer is my NEW indicator: EMA_MUSIC_STAVE_BY_COWBEARCAR
ChartArt
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It depends on your definition of "right" indicators. I have also tested like 200+ indicators. The DMI is very slow. The DMI only shows you what happened two to three days ago, which you can see by yourself if you look at the price. So the DMI doesn't give you any new information. And the Fisher Transform is also slow (but much less than DMI) and tends to give false signals in strong trends. Bollinger Band is most times ok, because it uses SMA. But BB is similar to CCI (which also uses the standard deviation) in some cases showing sell signals too early, like the TRIX in this case (which uses the rate of change).
The only thing which never gives you fault signals are SMA and EMA moving averages.
TerenceTam
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Yes, best indicators are moving averages, thus I rearrange the GMMA into my EMA_MUSIC_STAVE.
MUSIC STAVE make each EMA similar height if possible, then you can use ruler to test 1:1 height reversal.
Although I poor in music, many people good on it and know when to beat.
That's why I set up 3 calculated line by the formula 2H-L.
Thus, I would try to ENTRY when beat EMA7 and stop lose if drop 2-3pt below on EMA7.
On Week charts, the uptrend will continue 6+ weeks but may give 1week on adjustment.
Try to eat trend by stand back and take a look on week chart.