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The FOMC announcement is scheduled for next Wednesday, March 16th. When a Fed day occurs during options expiration week, as the upcoming one does, the market tends to trade sideways-to-up in the three-day window including the day of the announcement and the previous two sessions. In this case, that suggests the S&P will be at a similar level or a bit higher next Wednesday compared to this Friday’s close. Over the last 30 occurrences of this pattern, the S&P was up 20 times (67%) and down 10 times, only slightly better than random odds. Average gain and loss were both small at 1.2% and 0.8% respectively. Big moves were usually to the upside, with 2% moves 5-1…

When an FOMC Announcement Occurs During OpEx Week
03/16/22… S&P500 ??? last three sessions
12/15/21… S&P500 -0.1% last three sessions
06/16/21… S&P500 -0.6% last three sessions
03/17/21… S&P500 +0.8% last three sessions
12/16/20… S&P500 +1.0% last three sessions
09/16/20… S&P500 +1.3% last three sessions
09/18/19… S&P500 -0.0% last three sessions
06/19/19… S&P500 +1.4% last three sessions
12/19/18… S&P500 -3.6% last three sessions
06/13/18… S&P500 -0.1% last three sessions
12/13/17… S&P500 +0.4% last three sessions
06/14/17… S&P500 +0.3% last three sessions
03/15/17… S&P500 +0.5% last three sessions
02/01/17… S&P500 -0.7% last three sessions
12/14/16… S&P500 -0.3% last three sessions
06/15/16… S&P500 -1.2% last three sessions
03/16/16… S&P500 +0.3% last three sessions
12/16/15… S&P500 +3.0% last three sessions
09/17/15… S&P500 +1.9% last three sessions
06/17/15… S&P500 +0.3% last three sessions
03/18/15… S&P500 +2.3% last three sessions
12/17/14… S&P500 +0.5% last three sessions
09/17/14… S&P500 +0.8% last three sessions
06/18/14… S&P500 +1.1% last three sessions
03/19/14… S&P500 +1.1% last three sessions
12/18/13… S&P500 +2.0% last three sessions
09/18/13… S&P500 +2.2% last three sessions
06/19/13… S&P500 +0.1% last three sessions
03/13/12… S&P500 +2.2% last three sessions
12/13/11… S&P500 -0.7% last three sessions
03/15/11… S&P500 -1.0% last three sessions

Also keep an eye on S&P500 volume today. If it comes in under 2.58 billion it would mark the third consecutive day of declining volume. When S&P volume steadily drops with three sessions remaining before an FOMC announcement, the market has rallied over those next three sessions in 12 out of 13 occurrences since 1990…

SPX Volume Down Three Sessions, 3 Days Prior to Fed Day
07/23/21… SPX -0.3% three sessions later
03/12/21… SPX +0.8% three sessions later
09/14/15… SPX +1.9% three sessions later
10/24/14… SPX +0.9% three sessions later
10/25/13… SPX +0.2% three sessions later
09/13/13… SPX +2.2% three sessions later
09/16/10… SPX +1.3% three sessions later
03/13/09… SPX +5.0% three sessions later
05/04/07… SPX +0.5% three sessions later
06/26/06… SPX +1.8% three sessions later
03/21/96… SPX +0.6% three sessions later
01/29/93… SPX +1.9% three sessions later
06/26/92… SPX +2.3% three sessions later

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