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FOMC

Fight or Flight?On February 1st, the Federal Reserve (Fed) announced a widely-expected 25bps rate hike. This was the rallying cry for the current market rally to continue. Is this confidence warranted? An interesting note is that the FOMC meeting minutes and the associated press conference appeared contradictory in nature because there was not a straightforward hawkish or dovish narrative across both. The statement was hawkish. Meanwhile, Fed Chairman Powell’s language in the press conference was remarkably dovish, describing the disinflation process as having started and as "encouraging and gratifying". This was the point that markets took as the signal to continue the recent rally. Precious metals, equities, and risk assets have all seen significant post-meeting relief. The first innings of a recession always appear to be somewhat of a soft landing in which inflation and growth begin to slow gradually. Yesterday’s meeting echoed the idea that recent indicators point to a modest increase in spending and that inflation has eased, precisely what the first innings of a recession would predict. As markets, potentially shortsightedly, adopt the soft landing narrative, the Fed’s lack of pushback against easier financial conditions added fuel to the fire. Given this, it is doubtful that markets will stop rallying until one of two cases occurs: First, if data comes in hot, it potentially frightens markets into thinking the Fed will turn back hawkish and raise rates more than the recently observed 25bps hike. The second scenario is the other extreme. Should data start coming in highly recessionary with lower inflation and weak growth, this will eliminate all believers in the soft landing narrative, thus halting the rally. However, at present, it looks like the market rally of 2023 could continue until either of these scenarios happen. An important thing to note is that whenever inflation has exceeded 5% in the past, it has never come back down without the Federal Funds Rate exceeding the rate of CPI inflation. Considering the Federal Funds Rate is currently between 4.5% and 4.75% whilst CPI inflation is at 6.5%, more rate hikes are on the horizon unless data comes in highly recessionary. CPI data on the 14th of February will provide significant insight into whether or not the Fed will follow the likes of the European Central Bank & Bank of England and go with a 50bps hike rather than a 25bps hike. Another important thing to note is that Apple , Amazon , and Alphabet (the parent company of Google ) all missed earnings last night. If three of the world's largest companies missed earnings, it does not breed confidence for economic hopes of avoiding a recession. One thing seems certain, the S&P500 is likely to take a hit when the NYSE opens later today.
by Coinrule
22
Don't Fight The FedOn February 1st, the Federal Open Market Committee (FOMC) meeting minutes were released, and the Fed announced a 25bps rate hike. As such, markets started to rally. An interesting note is that the FOMC meeting minutes and the associated press conference appeared contradictory in nature because there was not a straightforward hawkish or dovish narrative across both. The statement was hawkish. Meanwhile, Fed Chairman Powell’s language in the press conference was remarkably dovish, describing the disinflation process as having started and as “encouraging and gratifying”. This was seen by markets as the signal to continue the recent rally. Precious metals, equities, and risk assets have all seen significant post-meeting relief. The first innings of a recession always appear to be somewhat of a soft landing in which inflation and growth begin to slow gradually. Yesterday’s meeting echoed the ideas that recent indicators point to a modest increase in spending and that inflation has eased, precisely what the first innings of a recession would predict. As markets shortsightedly adopt the soft landing narrative, the Fed’s lack of pushback against easier financial conditions added fuel to the fire. Given this, it is doubtful that markets will stop rallying unless one of two cases occurs: First if data comes in hot, it potentially frightens the market into thinking the Fed will turn back hawkish and raise rates more than the recently observed 25bps hike. The second scenario is the other extreme. Should data start coming in highly recessionary with lower inflation and weak growth, this will eliminate all believers in the soft landing narrative, thus halting the rally. However, at present, it looks like the market rally of 2023 could continue until either of these scenarios happen. An important thing to note is that whenever inflation has exceeded 5% in the past, it has never come back down without the Federal Funds Rate exceeding the CPI . Considering the Federal Funds Rate is currently at 4.65% and CPI inflation at 6.5%, more rate hikes are on the horizon unless data comes in highly recessionary. CPI data on the 14th will provide significant insight into whether or not the Fed will follow the likes of the European Central Bank & Bank of England and go with a 50bps hike rather than a 25bps hike. Another important thing to note is that Apple , Amazon , and Alphabet (the parent company of Google ) all missed earnings last night. If three of the world's largest companies missed earnings, it does not breed confidence in the hopes of avoiding a recession. One thing is for sure, the S&P500 will take a hit when the NYSE opens later today.
Long
by Coinrule
Gold Leaves Behind Bearish Engulfing as Fed Push Losses SteamGold prices dropped almost 2 percent on Thursday, the most since the summer of 2020. XAU/USD was unable to find follow-through after a boost from the Fed earlier this week. Upbeat US jobless claims brought data into focus ahead of Friday's non-farm payrolls report, pushing up the US Dollar. A Bearish Engulfing is in focus. Downside follow-through is lacking at the time of publishing. A breakout under the 20-day Simple Moving Average exposes the 50-day line. Negative RSI divergence is also present, showing that upside momentum is fading. Otherwise, key resistance is the 1978 - 1998 zone above.
FX_IDC:XAUUSDShort
by QM_Dubrovsky
1
S&P500 - Decision timeHello traders! As stated in our previous post, linked in the description, we are following two main scenarios on S&P500. According to the bullish scenario, the 5 waves labeled in the chart should form a leading diagonal for wave i of C in a primary wave (B) to the upside targeting 4300+. In this case we should now retrace in wave ii of C. According to the bearish scenario, that movement from december's low would be a triple three correction in wave 2/B and thus we may reverse in a wave 3/C aiming to lower targets (3640 big wolfe wave target) or possibly lower lows. See the chart below We managed to catch a short entry at @4076.1, and we are going to hold it (stop loss on entry) following this plan: -if prices arrives to the 3900-3940 area, which is a target in both scenarios (and wolfe's wave target), we will close at least half of the position. At that point we will evaluate whether the decline is impulsive (motive wave) or corrective( three waves). In the former case, once it extends lower and if actvivates the red ascending broadening wedge creating a 5-waves pattern, we will search for adding a short at the retracement. In the latter case, we will evaluate bullish setups around the 3900 area for the green arrow path in the main chart, possibly keeping a piece of the initial short to be hedged for both scenarios. - If prices spikes up and kicks us out at entry, we will reevaluate a short position around the 4125-4135 area, for a completion higher of the above mentioned leading diagonal, ad apply the same plan to the new short. As we e xplained before we believe that fundamental news and events unfold simultaneously with the price action, and all the information available is encoded in chart patterns. Nonetheless, it is clear that the FOMC will bring high volatility, so it is important to reduce risk and have a clear plan prepared. Will update below, happy trading ;)
CAPITALCOM:US500Short
by GMR-Capital
6
ArmanShabanTrading |🔴 XAUUSD - Heavy Correction is Coming ?An Important TA of $GOLD : As you can see, since yesterday the price faced buying pressure after reaching 1900.870 and was able to grow strongly to the level of 1931$, now the price is trading in the range of 1924$ and according to the today's news , I give the probability of the price falling from this range , I have specified 2 scenarios on the chart, which are accurately and detailed , the targets are $1920, $1918, and $1906, respectively! Follow me for more analysis & Feel free to ask any questions you have, I'm here to help. ⚠️ This Analysis will be updated ... 👤 Arman Shaban : @ArmanShabanTrading 📅 02. 01 .2023 ⚠️(DYOR) ❤️ If you apperciate my work , Please like and comment , It Keeps me motivated to do better ❤️
OANDA:XAUUSDShort
by ArmanShabanTrading
32
S&P on the Rise: Can It Break Through Resistance?The recent Fed interest rate decision has sent shockwaves throughout the market, and the S&P 500 is no exception. Prior to FOMC The index had made a convincing break above a 4-hour trendline that dates back to January 2022. However, now it has encountered a strong resistance level. Despite the strong upward momentum, traders should be cautious and monitor this key level closely. If the S&P 500 is able to break through this resistance, there could be potential for further gains. On the other hand, if the resistance holds, we might see a pullback in the near term. Keep a close eye on this development and stay tuned for updates.
CME_MINI:ES1!Long
by natron
GOLD SHORT TERM INTRADAY IDEAIntraday Analysis - ( 2 FEB 2023 ) GOLD ANALYSIS AFTER FOMC The feds decided to go as per forecasted and raise a 25bps which was a slow down in rate hikes for months to come now. In a live weekly recap session i did mention a 25 bps will cause a rally across all risk assets, including commodities and crypto and the stock market. The fundamental sentiment has not change just yet with no stance or remarks from jerome to continue its fight for inflation instead its just on the fence news that was sort of repeated since last FOMC. Now we will still adapt to current market sentiment and look for buys. HRHR buys 1934 MRMR buys 1939 / 1935 SAFEST buys upon break out of the current range we are in at 1957 Will only look for long term shorts or potential scalp shorts below key level at 1929 which shows that the entire upside move was completely cancelled out. This could potentially happen if theres an even bigger fundamental news in play or shift in market sentiment in this case we will be observing whats coming next which is NFP tmrw.
OANDA:XAUUSD
by CJ_GOLDPIPS
How a Housing Market Crash Equals New Stock Market HighsTraders, I believe this chart is so important it warrants revisiting the data. Indeed, the fed has to be cognizant of this same data and is most certainly is watching it closely. Therefore, we must do the same. In this video, I am going to explain why the housing market data, even though it's week, supports my thesis of a blow-off top in the stock markets this summer. Stew ⛓️ 🔗 Useful Links 🔗 ⛓️ My Housing Market Chart: www.tradingview.com
ECONOMICS:USHMI
by stewdamus
1
TSLA Re-Accumulation to Big DistributionTopping reversal candle on the 4 hr. I see Bullish and Bearish scenarios- * Yes Tesla can go to $180 first, it has to happen before Wednesday Bearish- pullback and double top , Rising Wedge or complete breakdown from here. Bullish-continuation on new support trend-line past $200… to confirm V bottom recovery (Tsla is one of few stocks that will be green while Markets go red) *** everything dependent on Markets to confirm Bull cycle or to fade the rally and begin the Final leg Down of Correction. My Thesis,( until price action delivers a different scenario)- I’m leaning Bearish, but with a possibility of higher high along with Bearish Divergence confirmation. Just to accumulate more retail liquidity before February selloff -Smart Money began buying in December- taking profits in February lines up with lower Tax on gains and portfolio rotation I believe economic data or FOMC will maintain hawkishness and rug-pull the markets next Wednesday. Macro Data: - NYSE advance decline is supporting weakness in markets -Retail & Smart money are completely divergent -Put/Call ratio beginning to favor Bears -Vix bullish divergence setup forming -DXY, 10yr & 2yr bond yields are all rising with markets -HYG Bonds are falling while markets advance -Retail influx & euphoria is at highest level since 2021 & 2022 August high (LARGE SELLOFF) - Feb & March seasonally are sell-off & Volatility spikes until April ***Everything is pointing to a Large pullback or “The Final” leg of Bearish Correction
NASDAQ:TSLAShort
by Black_Sheep1
9
If the SPY breaks above $411.50 tomorrow - the RACE HIGHER is ONHave you been following my research? Maybe you should stop to consider what is possible with advanced predictive modeling solutions. For example, here are my SPY Cycle Patterns for the past 20+ days - and 20+ days into the future.... 1/18/2023 POP 1/19/2023 1/20/2023 BaseRally301 1/21/2023 Break-Away 1/22/2023 Rally-111 1/23/2023 Carryover 1/24/2023 Inside-Breakaway 1/25/2023 Harami-Inside 1/26/2023 CRUSH 1/27/2023 Rev-Rally 1/28/2023 1/29/2023 1/30/2023 Inside-Breakaway 1/31/2023 Break-Away 2/1/2023 Rally-111 2/2/2023 Rally-111 2/3/2023 Carryover 2/4/2023 CRUSH 2/5/2023 Rev-Rally 2/6/2023 2/7/2023 2/8/2023 Inside-Breakaway 2/9/2023 Harami-Inside 2/10/2023 CRUSH 2/11/2023 GAP Potential 2/12/2023 GAP-Reversal 2/13/2023 Rotation 2/14/2023 Top/Resistance21 2/15/2023 Consol-210 The high (so far) on the SPY reached the $411.46 level (a clear DOUBLE-TOP). Above that level, we'll see $418~421 fairly quickly. Please pay attention. Ask yourself one question: who else do you know that can predict price movement 120+ days into the future? Here we go.
AMEX:SPYLong
by BradMatheny
EUR/USD inches closer to 1.10 ahead of FOMC and ECBWe are heading into a potentially very volatile 24-hour period, with the Fed set to kick things off today, before the BoE and ECB make their policy decisions on Thursday. The EUR/USD and GBP/USD will thus be in focus. The trend for both remains bullish heading into these central bank meetings, but let’s focus on the EUR/USD here. All eyes on Jay Powell and FOMC The EUR/USD has remained inside a tight range over the past several days, with 1.0900 area offering resistance and 1.0800 support. Ahead of the FOMC, it has tried to break away above 1.09 handle, although the bullish momentum has understandably been weak with most traders sitting on their hands until the Fed decision is out of the way. I think there is a good chance we could see a bullish break out soon with 1.1000 likely to be the main short-term objective, owing to further weakness in US data. But on FOMC days, there’s usually a bit of volatility before the trend resumes. So, don’t dismiss the potential for another dip before the resumption of the bullish trend. The FOMC is expected to reduce the pace of hiking further, to 25 basis points at the conclusion of its meeting today. The policy statement will be released at 19;00 GMT, with Jay Powell’s presser to start half an hour later. The Fed Chair is likely to keep further hikes on the table and lean against bets they will cut later this year, something which may get interpreted as being hawkish. But as we have seen in recent Fed meetings, the market has been quick to dismiss the Fed’s hawkishness and price in a lower terminal interest rate. Are we going to see a similar response this time, too? More signs of weakening US economy Well, the weakness in US data continued today, with the ADP payrolls printing its lower number since last January at 106K vs. 170K eyed. On top of this, the ISM manufacturing PMI fell deeper in the contraction territory, printing 47.4 vs. 48.0 expected and 48.4 last. Worryingly, new orders contracted at a faster pace too, printing 42.5 vs. 45.1 in December. Employment in the sector declined. Today’s weaker ADP and ISM data follow several other weaker-than-expected data on Tuesday, all helping to re-enforced expectations that the Fed will be more inclined to stop its hiking cycle sooner. Employment Cost Index, a key measure of wage inflation, rose by 1% q/q, which was weaker than expected, while the latest Chicago PMI reading (44.3 vs. 45.1 expected) and CB Consumer Confidence index (107.1 vs. 109.1 expected) both also disappointed. Focus will turn to ECB next The European Central Bank is set to hike interest rates by 50 basis points on Thursday, lifting the Main Refinancing Rate to 3.0% from 2.5% currently. While this is fully priced in, there’s still a lot of uncertainty in terms of forward guidance, which is what will ultimately determine how the markets react on Thursday. Given the recent weak indicators from Germany, it looks like growth at the Eurozone’s largest economy has weakened again, which could be an indication for what’s to come in the early parts of this year. As a result, the ECB will not want to be too aggressive in its forward guidance, especially as other central banks have now either slowed the pace of tightening or paused it. That said, given that inflation remains very high here compared to the US, the ECB is going to tighten its policy at least a couple of more times before pausing. This should help provide support for the euro on the dips. How will the markets react to the ECB decision? So, the interest rate decision should be a straight-forward 50 basis point hike. Let’s take a look at various scenarios insofar as the forward guidance is concerned. Investors will want to know whether the ECB is going to fully commit itself to another 50-bps hike in March and at its next meeting. 1) If so, this should send the EUR/USD 100-200 pips higher on the day, above the 1.10 handle, and cause the DAX and other European indices to slump. 2) The second scenario would be if the ECB keeps the door open for 50-bps hike in March but provides a less hawkish forward guidance for its subsequent meetings. This would probably prevent the EUR/USD from moving too much away from 1.10 handle and keep equity market bulls somewhat happy. 3) The third scenario would be if the ECB does not pre-commit to any further 50-bps hikes and instead suggest that the pace of tightening will slow down. In this scenario, the EUR/USD should drop sharply, perhaps by 100-200 pips in initial response to around 1.0700, while the DAX could surge by 2% or more. By Fawad Razaqzada on behalf of FOREX.com
by FOREXcom
Bitcoin movement in FOMC! So right now Bitcoin is bullish + bearish as well it's upon whales now how they are going to play BTC and FOMC results, higher changes are for 25BPS well let me tell you what mindset you should have right now! Till the time we don't break the 21430-21300 key support level don't be bearish Right now I am still Bullish on bitcoin and I am hedging the trades just because I have my long-running from 21500 Again be bullish till we break the support of 21300 ✅
by TradingTigers07
Can Dow Jones Rise Above Falling Trend Line?It's FOMC day! The markets have already priced in the 25bps rate hike so Powell's speech will be the most important thing today. A dovish Fed can help Dow Jones break the falling trend line and finally see acceptance above the resistance level of 34000. While I'm expecting a dovish speech from Powell today, the inflation fears are slowly fading away and recession fears are taking over, so in this environment, it's best to trade with minimized risk on stocks.
TVC:DJI
by egegonulcan
USDJPY H4 - Short Signal USDJPY H4 - Depending on the way the FED sways later on this evening, will no doubt impact this pair, whilst the dollar has whipsawed somewhat, the YEN is holding it's own against the dollar, a typical scenario where we are seeing a firefight between two relatively bullish pairs for the moment, ideally we want to sell something knowingly weak against something knowingly strong. However, it's worth keeping an eye on this pair from this key trading zone around the time of the FOMC
Short
by Trade_Simple_FX
1
DXY H4 - Long SignalDXY H4 - Breakout seen last night, which saw us follow gold from $1900 to $1920/30 respectively. Exhaustion seen and that's where we posted the short signal from. $1930, hopefully down towards $1900 support and possibly beyond, depending on the outcome and projections from the FED later on this evening. Not entirely sure how much the USD will want to move ahead of this economic event, as you all know by now, we often see stagnated markets before big news releases.
TVC:DXYLong
by Trade_Simple_FX
uvxy short volume uptickweve slightly gained in vix, and the ftz from top of short leads out to where uvxy should make its low sub $4... if we examine the capitalcom vs finra we see that contango in vix is still coagulating around a major demand zone low into its decay. i still think split will be bullish for vix, but perhaps we clear the pop in fomc, and the loose steam is actually bullish in the long run i would still expect vix to lose weekly, as well as lose by the end of ftz.
UShort
by cerealpatterns
USDJPY TO 139"Based on a thorough technical analysis, I have identified an ascending triangle pattern on the 4-hour chart of the US Dollar Index (DXY) and a bearish flag formation on the daily chart. Additionally, a doji pattern has been observed on the monthly chart, indicating potential market indecision. On Wednesday, it is expected that the DXY will experience a rise due to the Federal Open Market Committee (FOMC) meeting. Furthermore, Governor Kuroda's recent statement refusing to tighten monetary policy is likely to result in a weaker Japanese Yen, thereby contributing to the expected rise in the DXY. I wish all traders a profitable and successful trading week ahead."
Long
by kithinjimicah
5