Most investors lack the basic knowledge of reading a chart. Knowing how to read a chart allows you to tell the future. In other words, reading it correctly lets you know if the stock will go up or down in the next day, week or month. The simple technique I am using is based off the NASDAQ 100 chart and is an indicator of whether the Federal Reserve will cause a stock market rally or hard sell off on Wednesday, when they give their much anticipated FOMC statement. The reason I am using this chart is because the NASDAQ is a risk on/risk off index. This is important because the more dovish the Federal Reserve is, the more money will flow into NASDAQ 100 stocks.

This indicator is so easy a newbie investor can do it. Notice on the NASDAQ 100 chart is a quad top on the chart. This means the stock chart has had trouble for times in a row breaking out.

 The way to read the stock chart going into the Federal Reserve FOMC statement on Wednesdasy at 2pm is, is the NASDAQ 100 above or below that level? Above tells you smart money which is big money, is banking on an extremely dovish Fed and no rate hike. If the NASDAQ 100 is below that trend line, be very careful. While it is likely the Federal Reserve will not hike interest rates anyways, their statement may be much more hawkish and spell trouble for the stock market.

By Pro-Trader