how to trade FED rate decision tomorrow

Afternoon team.

Big week of news is upon us with FED rate announcement coming tomorrow.

NO time to waste, let’s jump in…

Impact Snapshot

  • Employment cost index climbs 1.1% in the third quarter

  • Consumer confidence falls to 5-month low on worries over inflation

  • Tomorrow’s Key Earnings: 

Market Evaluation

Tomorrow is shaped to be an eventful one with plenty of economical reports and the long awaited Fed’s rate decision.

The S&P 500 edged higher, but was still on track for a third monthly drop — its longest losing streak since March 2020.

The Federal Reserve remains cautious about easing up prematurely, given their significant shortfall in hitting the inflation target over the past years. 

It is expected that in their upcoming announcement, they will indicate their readiness to increase interest rates once more, should inflation deviate from its current downward path.

All eyes will be on Fed Chair Powerll press conference that will offer plenty of volatility across the board.

Markets Breakdown

Monday’s session highlighted the importance of paying attention where the market value is shifting rather than price. Price is simply an advertising mechanism.

The term focusing on value and not price, is possibly the most challenging thing to overcome when you’re looking at the markets from a different prospective.

We are simply throwing the idea out there so you can potentially think about it down the line and have it in the back of your head.

The purpose of the futures market is similar to any other market. It exists solely to facilitate trade, and it does so by auctioning from high to low and low to high, in order to find an area where trade can best be facilitated.

On our market brief yesterday (Read it here), we gave insights of the early identification of the market forming a balance area where 2-way trading activity can take place.

As we always say, the market remains on a balance state that favors rotations from one side to another until it enters a state of imbalance and start seeking the next fair value area for 2-way trading.

Our points of reference were the extremes of these rotations, offering perfect opportunities around them with the confluence of volume and our indicators that triggered the bullish scenario. Read the update we’ve made on X here.

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Our morning plan today highlighted the importance of paying attention to overnight corrections yet again. Read our daily brief here. For the rest of the day, the goal will remain the same, observe the attempt of the market to breakout from balance or rotations towards Friday’s session.

The targets we look for until NY close & Targets to pay attention Tomorrow:

  • Upside Levels: 4206/4225/4247

  • Downside Levels: 4176/4166/4154

Ok, that’s all we got.

We’ll see you again on Thursday after we try & survive the charts tomorrow.

Cheers!

-The QuantVue Team