If Fed cuts only 25, what is best strategy?

[jeffbrewer]

Go long if the dow breaks out above 12,500
Go short if the dow breaks down below 12,400

figure out your own stops and profit targets

 

[DeepFried]

Quote from TokyoGhetto:

Do you work at SocGen??

 

[andrewbee]

Sitting back and watching the market for pure entertainment value ....

 

[Jayford]

Quote from Jayford:

I am going to bracket ES and ER2 to catch a spike either way, and then hopefully bail before the inevitable whipsaw.

then wait for it to calm down for a directional position into the close.

i would assume a big sell off to previous lows on a .25, but ya never know. This is why I am bracketing for either way.

And yes, this is a pure gamble for the 1st trade, but the R/R will be really good. I'll keep the stop tight as I am expecting an initial spike.

BTW, the bracket won't be placed till about 2 mins before the release. it will be tight above and below.

Worked like a charm! not filled ER2, but took 10 quick points outta spoos. Now waiting for mkt to settle and trend into close.

 

[silvermotion]

long with no stop = CHACHING!!!!

lol

 

[Jayford]

just in case anyone is wondering (or cares). ER2 wasn't filled cause had a stop limit to prevent massive slippage. gambled on the ES and got in just before report because market players seemed to know what was going on.

 

[DataCruncher]

jayford, interesting play you did, can you tell me which broker you are using and what exact stops and limits you used on the bracketed orders?

 

[DataCruncher]

looks like SPY crossed its 20 day SMA. i don't think it will hold

 

[ManhattanTrader]

you may want to check these:

bracketing the FED

playing FED meetings

options hedge

 

[Jayford]

Quote from DataCruncher:

jayford, interesting play you did, can you tell me which broker you are using and what exact stops and limits you used on the bracketed orders?

I use IB. I don't seem to have the probs other people do with them. if i did more volume, I'd go over to transact however.

I bracketed ER2 at 701.20 sell stop/700.20 limit. and 705.20 buy stop/706.20 limit. Set these prices based on hi/lo of 2 mins just prior to report.

Didn't want to give up more than $100 per ct slippage. Market gapped right over me. no fill.

I entered the ES just before report, small size as it was a gamble, but with good R/R.