Posted by Pete Stolcers on March 14

Posted 9:30 AM ET – Yesterday the market opened flat and it could not get out of the first hour range. Trading volume was light and we can expect more of the same today. The big snowstorm is hitting the East Coast and the FOMC statement will be released tomorrow.

The S&P 500 is down eight points before the open and we are testing support at SPY $237. There are some nervous jitters ahead of the rate hike. It has been typical for the market to decline ahead of the Fed and to rally after the announcement. This will be the second rate hike in three months and I doubt officials will want to “spook” investors with hawkish rhetoric. I’m expecting a “wait-and-see” attitude that points to September. This would be a market friendly statement.

Oil prices continue to drift lower and that will weigh on the market today. Once energy stocks find a floor, the market will bounce. Low oil prices have consequences and benefits and I view this decline in oil as market neutral. Low oil prices will impact emerging markets more than the S&P 500

Quadruple witching is on Friday – Thursday will be busy.

Look for nervous trading today that settles down after the first two hours. Traders will square up positions and we will be “dead till the Fed”.

Swing traders should use SPY $237 as a stop on a closing basis. You should have a few call positions on, but not many since the market could not close above SPY $238. I would prefer to get long after a bullish reaction to the FOMC statement.

Day traders should let the market come in this morning. Wait for support and use the first hour range as your guide. If the market is below the first hour low favor the short side. If the market is above the first hour high and it is above SPY $237, favor the long side. Keep your size small – trading activity will taper off quickly.

This is the calm before the storm. Trading volumes will be brisk Thursday and Friday and there will be plenty of opportunities.

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