Today’s Federal Reserve interest rate decision marks a huge day in American economic history and allows for the catalyst needed to profit in the markets.

 

UPDATE 12/23/2015: The Bond Market has not sold off. How I plan to trade it.

 

 

*For more updates and exclusive content, as well as an exclusive TST Combine discount, sign up for our mailing list.

 

 

Today, the FED made one of the biggest announcements in 9 years. They decided to raise the interest rates by .25%. In the macroeconomic perspective, financial institutions and the general markets should benefit. Depending on where you stand on car loans, credit cards and mortgages then your interest rates are likely to go up.

In fact this should be only the beginning of the raise in interest rates that the FED is planning to implement. The AP reports:

“The central bank said in a statement after its latest meeting that it was lifting its key rate by a quarter-point to a range of 0.25 percent to 0.5 percent. Its move ends an extraordinary seven-year period of near-zero borrowing rates. But the Fed’s statement suggested that rates would remain historically low well into the future, saying it expects “only gradual increases.”

How to Trade It

For one, I hope all of you stayed out of the market ahead of the news. You will learn from my past experience that this is a bad idea. To note, the ZB 30 Year Bond market whipsawed at the release of the news, leaving many traders in the red for the day.

On the other hand, the markets increased almost 200 points in the mid afternoon session.

This begin said, we suggest sitting on your hands for the rest of the day today. Wake early tomorrow and figure out an entry.

The Dow, NASDAQ and S&P are good candidates for some long trades at a retracement level.

My market, the ZB 30 Year Bond we should go into detail.

 

Trading Bonds After The FED Interest Rate Decision

After witnessing the whipsaw in the market at the time of the decision I decided to sit on my hands for the rest of the session.

Here is what to do tomorrow.

I will be watching for the 30 Year Bond to show signs of weakness early in the day.

The key area here is on the daily trend line which is sill holding strong support in this market.

I may enter before the support is broken if signs of weakness are beginning to show.

Most likely I will wait for the support to be broken and enter on a retracement back to former support or Fibonacci levels.

Trade carefully and be patient. 2016 should be an excellent year for trading!

Hope it helps.

Good Luck Team

 

William