FOMC Rate Decision Will Destroy Your Positions If You're Not Ready
In a Nutshell
Ricky warns that the FOMC decision could trigger sharp moves, so traders should avoid leverage, size positions conservatively, and stay patient rather than chase further shorting into deeply oversold conditions. With global chip stocks already down 40–58% and earnings from Meta and Microsoft pending, the focus is on waiting for clearer direction instead of forcing aggressive bets. The LPP team is taking small, intentional trades, respecting oversold levels, and prioritizing capital preservation to finish the year green.
These notes were generated by AI and may contain inaccuracies.
Ricky from TechButSolutions is minutes before the FOMC rate decision. He asks viewers to get the video to over 500 likes and subscribe to the channel if they want him to live stream the FOMC decision for free. The Fed rate monitor tool shows the decision is in 1 hour and 39 minutes with a 36% probability of a rate hike and 63.5% probability of a rate pause.
Citadel's comment influenced the market with a big gap up on the possibility of a rate hike. For the month of June, inflation came in lower than expected. The Federal Reserve cannot justify raising rates when inflation came in below expectation, though anything can still happen.
Markets have taken a significant hit with LPP traders down to 1.75% at one point. The team did an amazing job giving the market time to identify its direction and going with the flow once it turned bearish. All trades had intentions shared, with mindful position sizing and profit taking. The trading session was not perfect, and it's easy to look back and wish positions were held longer, but markets are rational and always look for reasons to recover.
On the 5-minute timeframe, there's been a pattern of sell-off to recovery to sell-off to recovery to sell-off again. The market is incredibly oversold with risk too high to continue shorting. While continuing to short is possible, the oversold condition makes going long an option to entertain. The LPP team has already received announcements of the next series of trades.
Markets can continue to sell off, but understanding recovery potential is crucial, especially if the Federal Reserve pauses and markets celebrate or continue falling. There's significant fear in the market that requires close attention.
South Korea held an emergency meeting after its stock market lost nearly 40% from its recent peak with the government stepping in. Taiwan and Japan markets are also crashing significantly. SanDisk is down 58% since June 22nd from its all-time highs and down 30% this week alone.
When asked why Micron is preferred over SanDisk, the explanation is that SanDisk is significantly more volatile, and that degree of volatility isn't suitable for everyone. Leveraged ETFs add risk in this environment - while they work well when direction is favorable, they feel terrible when it's not. Micron is volatile but not as volatile as some alternatives.
Major drawdowns include: SanDisk down 50%, SK Hynix down 47%, with Samsung, Micron, Intel, and Western Digital taking major beatings. Michael Burry noted that Nvidia's 5-year credit default swaps are surging because the company is overreaching to sustain circular AI spending.
Stay patient, be intentional, and don't use leverage. There's nothing wrong with buying the dip or shorting the market, but aggressive positioning that leads to regret if direction turns is inadvisable. At oversold levels, going long makes more sense than continuing to short when markets are already incredibly oversold.
Microsoft and Meta are reporting earnings today. If they report something unexpected or the FOMC decision contains unpriced information, another leg down is possible. The preference is to invest at fair price ranges without over-leveraging, knowing it can get worse before better.
Buying less now is better than buying more, but having some exposure is better than having none. Position size should be watched carefully, leverage avoided, and if positioned well with time tolerance, the upside and recovery potential should be exciting despite possible further downside.
SanDisk is around $1,000 per share. Breaking below $1,000 presents higher risk compared to Micron, which is considered a safer play. If Microsoft and Meta report unexpected results or the FOMC contains unpriced information, everything could trade lower.
Some LPP traders are successfully shorting but closing positions daily, respecting how oversold markets are and how eager they've been to recover. The goal is to end the year on a green note.
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