Trading Plan for Tuesday, March 19th, 2024

Trading Plan for Tuesday, March 19th, 2024

Market Sentiment: Cautious ahead of FOMC decision

Weekly Volatility Risk: High (amplified by FOMC)

Supports to Watch:

• Immediate Supports: 5209, 5203 (major), 5191, 5182-77 (major support/triangle), 5171, 5165, 5157-55 (major), 5147, 5136, 5124-26 (major), 5115 (major), 5109, 5103, 5095 (major), 5087, 5083 (major), 5076 (major), 5072, 5066, 5060, 5055 (major)

Resistances to Monitor:

• Key Resistances: 5215-20 (major), 5230, 5236 (major), 5246-50 (major - triangle resistance), 5257, 5264, 5270, 5275-77 (major), 5283, 5295-5300 (major), 5306, 5313 (major), 5326, 5333, 5340, 5355, 5362-66 (major), 5370, 5377, 5385, 5395 (major), 5400-5405 (major)

Trading Strategy: FOMC Focus

• Holding Pattern: The market might be on hold until the FOMC announcement, so pre-announcement moves may lack conviction.

• Triangle Trading: The triangle setup with resistance at 5246-50 and support around 5182-77 defines the range for today. Profit-taking at each end of the range is advisable.

• Long Opportunities: Look for potential long entries at 5203 (especially if it's a major support test). Below that, interest in longs arises at the triangle support (5182-77). Avoid aggressive longs below 5182-77 with more substantial sell-offs possible.

• Short Opportunities (For experienced traders): Watch for short entries on failed breakdowns or bounces off resistance.

• FOMC Volatility: Expect increased volatility during and after the FOMC announcement.

Bull Case

• Triangle Support: Bulls need to defend the triangle support at 5182-77. Holding above this level allows for a potential retest of 5245-50 resistance within the triangle.

• Building a Base: Overnight basing below 5215-20 and above 5202/5209 support suggests potential for an upside move.

• Breakout Potential: A decisive breakout above the triangle resistance at 5246-50, likely post-FOMC, could lead to targets at 5275-77 and then the 5295-5300 zone.

Bear Case

• Breakdown Signals: Breakdown below the triangle support at 5182-77 could trigger significant selling pressure. Watch for shorting opportunities on failed breakdowns or bounces.

• Cascading Sell-off: If 5202 support fails, a deeper test of the triangle support is possible, potentially leading to a more severe correction.

News: Top Stories for March 19th, 2024

• FOMC Decision: The Federal Reserve concludes its March meeting, with a decision on interest rates expected at 2 PM ET, followed by a press conference with Chair Jerome Powell. Focus is on the Fed's outlook, dot plot projections, and any hints on the timing of potential rate cuts

• Banking Concerns: Economists warn of a potential new banking crisis triggered by the end of the Federal Reserve's BTFP program and potential geopolitical disruptions to credit markets.

• Economic Outlook: Recent economic indicators suggest a mixed picture. Fourth-quarter GDP growth was impressive, while the Conference Board's leading economic index signals a potential slowdown.

• Market Performance: Market volatility could spike around the FOMC decision. Long-term investors are focused on the Fed's interest rate path and its impact on earnings and valuations.

• Global Trends: The end of the negative interest rate era, the decline in North American Pay TV subscribers, and strategic CFO priorities highlight key global shifts.

Remember: The FOMC decision has the potential to cause significant market volatility. Be prepared to adapt your trading strategy accordingly, prioritize capital preservation, and focus on managing risk.