When I posted yesterday, I did not realize that the Federal Reserve Chairwoman was testifying before Congress today otherwise I would have warned about it.
The Chairwoman testified before the House Financial Services Committee on regulatory issues. I was wondering why the market behaved the way it did today with wild intraday volatility that hasn't been seen in weeks.
Yesterday I looked at the Bloomberg economic calendar for today but just did not notice the fact that the Chairwoman was speaking because there were just too many announcements (seventeen in all) on the calendar for today. So I missed it because I was focusing on key economic data like ADP, International Trade, PMI and ISM. It was after posting today's review that I realized that the Chairwoman started speaking at 10AM ET. At that point it made sense to me why the market acted the way it did.
As I have stated several times in the past, usually the SPX will drop when the Fed Chair is speaking then reverse to the upside midway into the testimony or after it (just as it happened today), and continue higher the next day. But if it doesn't drop during the testimony it means the market will close at the highs (big rise). Also, if it drops during the testimony but doesn't reverse midway into it or after, it means it will close at the lows.
Keep this event in mind so that in the future if I forget to address it the day before the testimony you will know what to do. It happens twice a year which already took place in February and July this year. I guess today's event was added for reasons I can't tell at this time. This is also not a two-day meeting as is usually the case. So it is hard for me to keep track of them given how infrequent they are and given that the Fed Chair is always on the economic calendar as speaking somewhere which doesn't mean much. The testimonies before Congress is what I care about because it affects the market since many are tuned in including the financial networks waiting to hear what she has to say.
I apologize for not posting this yesterday.
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