Why I got out

I sold my two long units at 871.25. I am still bullish, so why did I get out?

The main reason is that I think that between now and the Fed announcement at 2:15 pm New York time not much is going to happen in this market. It's not just the announcement itself. I also know that most days the first two hours of trading see most of the day's gains or losses and that another good trading opportunity generally does not develop until 1:30 New York time.

But there are other considerations at work here as well. One is risk control. The market has bumped up against its previous high at 872 (dashed red line). I would be surprised if that level did not attract sellers - perhaps in sufficient numbers to drive the e-minis into a reaction of 8-10 points. A reaction that big would put the market down to my entry levels, never a comfortable position for a trader. I find that I get the best results by hitting singles instead of going for the fences (in American baseball parlance). So the move to new highs for the day gave me an opportunity to do just that.

Looking more closely at the price action, I saw a minor potential volume climax (first pair of red arrows). After a rest period the market made new highs for the day on lower volume (second pair of red arrows). Since it was also bumping against the 872 level I took this for a warning that a reaction was likely to develop soon.

I am sticking with my 858-880 range estimate and expect to get long again shortly after the Fed news comes out. Meantime support is at yesterday's high (purple dotted line).