TMAD Update: FOMC & Big Tech Earnings Prep

$MSFT $META $SPX

Hi everyone,

Looking at the CME FedWatch Tool, the market is pricing 68.5% no change (hold 350- 375), 31.5% 25 bp hike to 375- 400. Current target remains 3.50–3.75%.

What Citadel said:

Citadel Securities (Frank Flight, head of macro) flipped yesterday and now calls for a surprise 25 bp hike this week. Their case: inflation risks still skewed higher, labor market no longer a downside risk, moderate energy-price rebound tips a finely balanced meeting, and a July move would maximize impact for Chair Warsh—bolstering his price-stability credibility and “emphatically ending the forward-guidance era.” They acknowledge it’s close, but prefer the tactical hit now to waiting until September.

Why we think they’re wrong:

Consensus (and most bank economists) still sees a hold. Recent soft-core prints and the July 18 data flow have already taken the July hike “off the table,” even in Citadel’s own prior note; one moderate energy bounce doesn’t override that. The Fed almost never delivers an untelegraphed hike when market odds are only in the low 30s (BofA notes it’s essentially unprecedented since 1994). Warsh can reinforce credibility just as effectively with hawkish language + a clear September bias without the shock-and-awe risk. Political noise and the preference for measured communication still point to hold + guidance shift rather than an immediate move.

Bottom line: base case remains hold; watch the statement and presser for how aggressively they tee up September.

Tech took a beating today. QQQ 0.00%↑ Hit 100DMA and bounced just below it. We still see the $660 as a GEX put wall, and we reached $667 today. For momentum traders, such as what we do in TMAD, this is not a bullish sign. There are pockets of strong flows that we detect with the scanner and can trade manually, but overall, the market remains difficult.

Besides FOMC, we have also MSFT 0.00%↑ and META 0.00%↑ earnings tomorrow.

We will do earnings prep below.

See what names we added today for longer-term and shorter-term trading, and tomorrow’s SPX Levels.