Leaks before FOMC?

Discussion in 'Trading' started by Pekelo, Jun 29, 2006.

  1. Pekelo


    When was the last time that we gapped up BEFORE an FOMC announcement? Or did I miss some good news this morning?

    Or is it possible someone leaked good news to the big players???
  2. jerryz


    lol i was just going to say that people say don't trade fed days. this morning sure looks like a good morning to trade. anyone have stats on how today compares to other fed days?
  3. very possible. VIX is dropping like the event is already over.
  4. probably banks tipped off and frontrunning liquidity injections ahead of the meeting, to create the appearance of a bullish market for the fed


    shouldn't the fed have a .com domain? aren't they a private bank with shareholders
  5. StreamlineTrade

    StreamlineTrade Guest

    No never. You cant leak what is already known to EVERYONE (but you :) )

    Everyone knows the Fed will raise rates by 0.25. The Fed tends to suggest where the rates will go long in advance as study of the Fed Funds or Eurodollar futures will show. Too much is at stake to shock the market with anything else - last time they tried that stunt there was a crash (87 I think)

    In my experience, when the number is released, there is a lot of volatility, but little net change by the time of the close.

    IMO volatility is small before the release because it is the main event of the day and markets tend to have already priced in the change so there is little else to move the market.

    Speculators tend to analysis how things were said rather than what was said. FOMC minutes are often better moves for the speculate opportunity.

    Never say never.
  6. dan05


    Hi Streamline,

    I agree with your volatility prediction and calm hours before.
    Check these past FOMC charts provided by TP.

    I will personally be flat for the day.
  7. just21


    They raised unexpectedly between meetings in early 2000 I think it was.
  8. Maybe the leak is for no hikes. The way the S&P rally, dollars dropping, crude rising. All the evidence points to no hike. Maybe some janitor heard it and sold the information, who know? We'll see how it plays out in a couple of hours.
  9. Greater rate hikes >less probability of further hikes>less market uncertainly about rate hikes> markets go higher
  10. It is also end of quarter and institutional buying usually comes on <b>strong</b> the day before the last day of the quarter or end of the month...

    there is even a pattern of the market selling off hard the day just before the end of quarter buy day... go back and look...




    If You Have The Vision We Have The Code
    #10     Jun 29, 2006