Wednesday is an FOMC meeting. In the past I’ve produced numerous studies examining how the market has performed surrounding these meetings. One scenario I have not yet shown is how the market has performed when it is short-term overbought go into the meeting. For this test I used a 2-day RSI to measure different levels of overbought.

(click to enlarge)

Over the last 19 years when the market has had positive momentum going into a meeting it has most often been able to maintain that momentum through the day of the announcement.