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Two Ways to Play: Market Awaits FOMC Statement

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Strengthen your portfolio in good times and bad.

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FOMC Day

The Federal Open Market Committee's (FOMC) statement is due out today at 2:15 p.m. EST. Everyone is expecting the Fed to maintain the 0% to 0.25% overnight interest rate target. But what investors will be looking for are any signs that the Fed's ultra-loose monetary policy will begin to end.

According to Bloomberg, Fed Chairman Ben Bernanke and his colleagues are likely to say that the US economy has been gaining strength. Economists will be looking to see how the Fed will eventually withdraw the unprecedented programs to jump-start credit including the purchases of almost $1.5 trillion in housing debt.

For more on the economy, see Richard Suttmeier's Bank Failures Will Accelerate in 2010.

From the Bull Pen: With unemployment still at a very high 10%, and the Fed's insistence that inflation pressures are nothing to worry about, the central bank likely won't lift a finger in raising rates. And that's why the inflation beneficiaries will continue to outperform. Notice ArcelorMittal (MT) breaking out to new highs. For the more passive investor, consider setting an initial position here, and add on a pullback towards $39 to $40.

From the Bear Cave: Those looking for a downside play consider stocks in the retail sector like Dollar Tree (DLTR). On the charts, it's got tight resistance near $49, so a buy stop can be set above that level.

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 0.93%, India 0.21%, Hang Seng -0.93%, Shanghai -0.59%, and Taiwan 1.63%.

Across the pond, we see the FTSE 0.47%, CAC 0.82%, DAX 1.19%

As of 8:15 AM EST, S&P Futures are trading +3.75 to 1107.75. Nasdaq futures are +9.500 to 1804.50

A Look at Commodities

Over in commodities, crude oil is +0.57 to 71.26 while gold is +11.60 to 1134.60 this morning. Silver is +10.50 to 17.5 and copper +4.200 to 318.35.

The dollar Index is -0.2600 to 77.0400.

On the Radar

Economics

08:30 Building Permits 570k cons.
08:30 Housing Starts 575k cons.
08:30 CPI
08:30 Core CPI 0.1% cons.
10:30 Crude Inventories
02:15 FOMC Rate Decision

Click here for the full trading radar.

Happy Hump Day! Good luck!
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Position in gold, silver

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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