Market At All-Time High – Buy Any Dip Ahead of the FOMC Statement

Posted 9:30 AM - Tuesday the market probed for support early in the morning and the selling was weak. Once support was established I started scaling into long positions and I mentioned that I would wait for the first market move before deciding how to position myself. In this case I faded the move. Stocks gradually inched higher the entire day and we are right at the all-time high this morning. Not much happening on the news front. Oil is down again and that will weigh on basic material stocks. We could see a rotation into tech. The daily trading range is very compressed and it will remain that way until the FOMC statement one week from today. As you know from my comments this week I believe that a quarter-point rate hike will happen and that the Fed will point to the back half of 2017 for the next move. The market will like this news. Any dip between now and the FOMC statement will be a buying opportunity. We will see nervousness and position squaring over the next week. This is a low probability trading environment so be patient with your day trades. Let the market move around the first 30 minutes and gauge the strength of the move. If it is wimpy, it is likely to reverse (think range bound). I like down opens since I am favoring the long side. Early weakness gives me a chance to identify stocks with relative strength. As soon as the market finds support I start buying. Resistance at the all-time high might provide a headwind. If we breakout, we should see a steady grind higher. Trading volume is light and the daily ranges are tight. I'm not expecting a big move today. Set passive targets and focus on good entry points.

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