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Two Ways to Play: Will FOMC Throw in a Surprise?

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Strengthen your portfolio in good times and bad.

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FOMC Surprise?

The Federal Open Market Committee will release its interest rate policy decision today at 2:15 EST. And although a rate hike isn't imminent, investors will be parsing through the statement for any language that could hint at a future increase.

An Associate Press article says Chairman Ben Bernanke and his colleagues are likely focusing on how to properly telegraph a future rate hike. The overnight Fed Funds rate has been held at a record low, near zero, since December of 2008. The Fed said it will commit to this policy for an "extended period." But many economists think that means at least six months or more and feel the FOMC could drop that phrase altogether.

From the Bull Pen: Consider that the Obama administration wants to pay homeowners to sell at a loss, and whether that is a sign of a robust economy. If not, then an easy Fed is the likely scenario. Momentum players will like the extra juice in stocks like Express Scripts (ESRX), which is coiling below $100. A sell stop can be set anywhere from 2% below entry or below $95.

From the Bear Cave: With so many bears looking for a tough Fed and the S&P 500 (SPX) hovering below resistance, it may be a tough time to short. But the sharp reversal in New Oriental Education (EDU) could signal trend exhaustion. A buy stop can be set above the $86 high.

For more ways to play and other trading ideas from more than 30 top market pros, take a free trial to our Buzz & Banter.

A Quick Check Around the World

Asian trading closed with the Nikkei -0.28%, India 1.27%, Hang Seng -0.27%, Shanghai 0.53%, and Taiwan 0.80%.

Across the pond, we see the FTSE 0.56%, DAX 0.76%, CAC 0.93%,

As of 8:20 AM EST, S&P Futures are trading +1.750 to 1147.500 Nasdaq futures are +3.250 to 1920.25.

A Look at Commodities

Over in commodities, crude oil is +0.19 to 79.99 while gold is +7.300 to 1112.70 this morning. Silver is +0.142 to 17.250 and copper +0.0325 to 3.3475.

The dollar Index is -0.2100 to 80.2950.

On the Radar

Economics

08:30 Building Permits 614k cons.
08:30 Export Prices ex-ag
08:30 Housing Starts 587k cons.
08:30 Import Prices ex-oil
02:15 FOMC Rate Decision 0.25% cons.

Click here for the full trading radar.

Good luck today!
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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