Is The Market Wrong About The Fed? Live Analysis
In a Nutshell
The speaker believes the Fed won't raise rates tomorrow despite 91.8% market probability, expecting markets to rally on the pause while current conditions are overbought with record bond yields and unaffordable housing. They're avoiding aggressive trades around the FOMC announcement, preferring to wait for confirmation before shorting and emphasizing small position sizes with strict risk management. Current positions include a small short on MSTR, with focus on minimizing losses rather than catching every move.
These notes were generated by AI and may contain inaccuracies.
91.8% probability that the Federal Reserve raises interest rates tomorrow, though the speaker remains unconvinced they will actually do so. The Federal Reserve will officially announce their rate decision in one day, one hour, and eleven minutes, followed by a press conference 30 minutes later.
A short position was taken on Intel during the live trading session. The stock gapped up shortly after markets opened then had a gap down. The short was closed out immediately after making $1,000 because it wasn't breaking pre-market support around 9830 and lacked progress.
A second trade was taken on Nvidia that broke even with a $72 loss. The position size was relatively small, and once it reached break even, the position was closed. The focus today was to avoid entering trades that could be regretted tomorrow.
Despite seeing posts everywhere about the FOMC rate decision and the 91% probability, there is distrust in the consensus. Kevin Walsh, hand-appointed by Trump, has always been very optimistic about having a task force to keep inflation and the job market under control. The belief is that he will bend the knee to Trump's request of not raising rates.
Markets are considered way overbought and overvalued. Global bond yields have hit record highs. US homes are now the most unaffordable in history. The 10-year Treasury in Japan surged to 3%, and the 10-year Treasury in the US crossed 5.025%, the highest level since 2007.
A sustained 5% treasury means money could be pulled out of the stock market and pushed towards borrowing costs even higher. For a half-million dollar home with 10% down payment at 7.17% mortgage rate, the monthly payment is $4,300, with only $354 going to principal.
Everything is flashing red flags. Oil prices are not thriving, consumers are not thriving, and the only thriving sectors are AI companies and AI infrastructure stocks. Markets remain irrational because Trump continues to step in with tweets that prop up the market.
The speaker wants markets to sell off because there is enough stress in the current economy that they should not be trading at all-time highs. However, markets have proven to be irrational and recover despite these conditions.
People are speculating that a rate hike is priced in. If a rate hike is announced tomorrow at 2 p.m. Eastern time, markets would break below QQQ 700 and begin to gap down. However, the conviction is that the Federal Reserve is not actually going to hike rates.
There is a common support range at 700 for QQQ and common resistance range around 730. Markets have been trading sideways with this range. Technically speaking, markets are closer to the support range than the resistance range.
If the Federal Reserve doesn't raise interest rates tomorrow and pauses, markets will celebrate and go back up. The speaker believes that if rates are raised, the hike is not priced in because Trump continues to send tweets to prop up the market, creating enough uncertainty to break support.
The speaker is okay with missing out on trades rather than taking unnecessary risks. The preference is to be late to a short and wait for confirmation, shorting only as markets are actively dropping, rather than shorting at a previous support range when everyone is talking about it.
The approach emphasizes buying the dip and then selling to get along, rather than jumping in early. For such a highly anticipated economic report like tomorrow's FOMC rate decision, the risk is considered too high to take aggressive positions.
Beginners should never be afraid to be invested in the market, but should not use leverage whether going long or short. Position size should be mindful, and leverage should not be used during uncertain times.
A small short position is open on MSTR due to a nice gap up, currently down $466. No trade was taken on Dell today despite seeing an overbought reversal discussed in the live trading session, as it was holding very well and the risk was considered too high. A 4% move was missed on Dell.
The speaker is not afraid to take advantage of opportunities but emphasizes not being too aggressive, especially for beginners. The advice is not to say it's better to be cash than invested, but rather not to bite more than you can chew.
Position size should be watched carefully. The job is not just to think about profit, but to manage and mitigate risk, not avoid it. There is no such thing as a perfect trader that never takes losses - the job is to minimize losses taken.
Live trading occurs every morning at market open for about 30 minutes to an hour, with sessions fully saved for later viewing. The program costs $110 a day with current sale pricing. One-time payment provides lifetime access. The link is the second link in the description.
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