Wednesday's TQQQ Model
Oh Wednesday! What an interesting day this typically is. For the Wednesday pattern, we typically see an immediate drop off to a low point, followed by an increase with a long plateau, before finding a high in the late afternoon and then a drop point. This model was built using data starting 2/27 through 3/13/19. Again a weighted moving average is used. Of important note is that Wednesday data from 3/20, the day of the FED meeting, is purposefully excluded.
On days the FED meeting is expected to make a big announcement, the market is usually quite tentative and will not find any direction prior to the publication of the FED meeting minutes. This was especially true 3/20 as we awaited the decision by FED to increase the interest rate. As we know, the FED decided to hold off increasing rates, and put any other increases for 2019 on hold due to concerns with an economic slowdown. Initially, the market took this as great news, and the prices increased dramatically following the meeting minutes publication. Below is the data from 3/20. I have purposefully excluded this from my Wednesday model as it deviates significantly. This would be more appropriate for models around FED meeting minute days. However, whether the market makes a dramatic increase (or decrease) would depend on a FED decision and the market's fickle behavior. In short, its probably best to avoid day trading on a FED wednesday, unless you are banking on a specific outcome. The model does reveal that if you miss the initial surge on positive news from the FED, there is still more positive upside that can be had.
On days the FED meeting is expected to make a big announcement, the market is usually quite tentative and will not find any direction prior to the publication of the FED meeting minutes. This was especially true 3/20 as we awaited the decision by FED to increase the interest rate. As we know, the FED decided to hold off increasing rates, and put any other increases for 2019 on hold due to concerns with an economic slowdown. Initially, the market took this as great news, and the prices increased dramatically following the meeting minutes publication. Below is the data from 3/20. I have purposefully excluded this from my Wednesday model as it deviates significantly. This would be more appropriate for models around FED meeting minute days. However, whether the market makes a dramatic increase (or decrease) would depend on a FED decision and the market's fickle behavior. In short, its probably best to avoid day trading on a FED wednesday, unless you are banking on a specific outcome. The model does reveal that if you miss the initial surge on positive news from the FED, there is still more positive upside that can be had.
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