A Quick Look At What Else Happened On Wednesday’s Fed Day

While most people will likely be focusing on the wild intraday volatility in the S&P 500 (^GSPC) (or other stock market indexes), let’s take a quick look at how Crude Oil, Gold, and the Dollar Index (continuous futures contracts) fared with Wednesday’s Fed announcement.

It’s a quick study in intermarket relationships.

First, the S&P 500 e-Mini (@ES) Continuous 5-min chart:

The S&P 500 surged after the initial release… and then collapsed further and faster than most people expected - failing at a new 2009 high.  The peak to trough move was 20 @ES points or roughly 2%.

Next, The US Dollar Index (@DX) 5-min:

The Dollar is currently inversely correlated with the S&P 500, meaning the Dollar plunged initially… then rallied sharply into the close (as the S&P 500 fell).

The Dollar Index made a fresh 2009 low then bounced off the critical (and ‘line in the sand’) support zone of $76 in the index.

On to mini-Gold (@YG) 5-min:

The mini-gold contract - which is roughly/loosely positively correlated with the stock market - also surged initially… then plunged into the close.  Gold did not make a new 2009 high Wednesday (though it wasn’t far away).

Finally, Crude Oil (@CL) which didn’t seem to be affected by the other volatility in the market:

This market surprised me today.  From the NYSE Open, Crude Oil plunged from $71.50 down to $68.50 per barrel before forming a tight range-bound day and having virtually no reaction to the Fed Decision though price did drift lower with the stock market and gold.

Crude Oil is generally positively correlated currently with the S&P 500.

The morning plunge was attributed to larger inventories, but usually cross-market currents form ripples when something as large as the Fed Announcement takes hold.

This mainly shows intermarket relationships and reactions to a large external stimuli (Fed Day).

All charts are created with TradeStation using continuous futures contracts - times are in Central Standard Time.

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