December 18, 2024 Fed Watch - Rate Cut During Trading Hours?
with Dale Wheatley 1:30 - 4:00pm Eastern
Watching the market reaction to Federal Reserve comments
Is a prime opportunity for options traders because of the typically sharp, immediate price movements that follow these statements. Fed comments often signal shifts in monetary policy, influencing interest rates, inflation expectations, and economic growth outlooks, which can rapidly affect asset prices across stocks, bonds, and commodities.
Options traders can capitalize on this volatility by positioning themselves in advance of anticipated announcements, using The Options Hunter strategies to potentially profit from price swings—whether bullish or bearish.
The rapid reactions in the market provide a unique window for options traders to enter and exit positions quickly, often with significant profit potential.
January 2024: Quantitative Easing Resumption
In January 2024, the Federal Reserve announced the resumption of quantitative easing (QE) measures, committing to purchasing $500 billion in government securities over the next six months.
This unexpected move was aimed at providing additional liquidity to the financial system and supporting economic growth. The market reaction was immediate.
The S&P 500 jumped by 3.5% on the day of the announcement, while the Dow Jones Industrial Average and NASDAQ Composite rose by 3.2% and 4.1%, respectively.
May 2024: Hawkish Stance Despite Slowing Growth
In May 2024, the Federal Reserve's decision to maintain a hawkish stance despite evidence of slowing economic growth led to significant market turbulence.
The Fed signaled its intention to continue with rate hikes to combat still-elevated inflation, surprising many who had expected a more dovish approach.
The S&P 500 dropped by 2.8% following the announcement.
In The January 31, 2024 Fed recap: Powell shoots down March rate cut
We saw the market reaction coming.
VXX 5 minute chart at 2.45pm Eastern
The VXX had a clear upside divergence at 2:45pm EDT that led to every major market selloff!
SPY 5 minute chart at 2.45pm Eastern
Clearly as the SPY pushed higher the MACD was flat indicating a potential move down and confirming what we saw in the VXX.
SPY 485 Puts 10c to $2
Brilliant, Absolutely incredible!!!
Returns on IWM puts did the best but even the SPY did well. Here's the SPY 485 puts that expired January 31, 2024.
Join Dale and a group of motivated traders on Fed Watch on December 18, 2024
We'll look for opportunities to leverage the Fed comments
While there's no guarantee we'll see the setups that we know yield the best returns, this is an opportunity to join the master divergent trader, Dale Wheatley for what may be a pivotal day.
Special Offer December 18, 2024 1:30 - 4:00 pm Eastern Live Market Zoom Meet with Dale Wheatley on Fed Watch.
Only $149 $97
