FOMC: On Average, A Good Day to Go Long

[Stocks-to-Watch]

Bespoke Investment Group is kind enough to let us know in a report this afternoon that the Federal Open Market Committee meeting of the Federal Reserve Board, scheduled for around 2pm, Eastern, tomorrow, will probably be a good trading day, given the average return of Fed meeting days.

90% of the time, the S&P closed in the green on the day of an FOMC meeting, up 1.4% on average, Bespoke has found, looking back to data since December of 2008, when the Fed Reserve lowered the fed funds rate to a range of 0% to 0.25%. The first half hour of the day has been the most rich, with an average rise of 0.67%.

The fly in the ointment is the Fed’s hiking of the discount rate on Feb. 17. Because that increase means the Fed is less accomodative, any sign of a withdrawal of key phrases — “extended period”, “exceptionally low” — can have a major impact on market direction.



Original Article Source by Barrons.com