Hi traders,
The Fed decision this Wednesday is the main event of the week. Oil and geopolitical developments remain a swing factor for inflation and risk appetite. Over the past six months, and especially the past three, we’ve seen momentum rotate into oil, shipping tankers, energy, and healthcare, then suddenly sell off hard as money moves into tech and high-beta names. Those then chop down, and momentum swings back into the war-related names. It’s a tough trading environment, and I think we’ll see more chop until Wednesday.
We can sit here and speculate about what the Fed will do and what the market will do. The FedWatch tool is now showing an 86.5% probability of a rate hike. We need to be patient and play the price action after the announcement.
We’ll share some trade ideas into this week, based on the flow on our scanner, but it makes sense to wait for a retest of the first breakout to play it safer on a week like this. We’ll also look at SPX levels for tomorrow and the longer term.
Let’s begin!
