Monday, September 16, 2024

♟ Exactly How to Trade the Fed This Wednesday

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Fed Rate Cuts Ahead

"For Catalyst Cashouts Traders (Like Many Of Us), It Sets Up Nicely For A SPY ODTE Strangle Trade."

Bryan Bottarelli, Head Trade Tactician, Monument Traders Alliance

Bryan Bottarelli

This week, all eyes are pointed squarely on the Fed...

And for good reason.

On Wednesday afternoon, the Federal Open Market committee will announce their next policy decision.

What we Know: They will cut rates for the first time in 4 years.

What we Don't Know: Going into the rate cut decision - it's a virtual coin-flip scenario as to the magnitude of the cut.

In my view, this 50/50 scenario could sets us up for a big market move in either direction.

You see, no matter if the Fed cuts 25 basis points - or if they cut a larger 50-basis points - that means that half of Wall Street will be upset as to the decision.

You've heard all the bickering before:

They waited too long...

They didn't act decisively enough...

They're behind the curve again...

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I'm sure there will be other arguments as well - but the important point is this...

The aftermath of the Fed's decision this week could be the newest rigger catalyst for added volatility in the market.

No matter which side of the argument you are on, the simple fact remains: The Fed is in a no-win situation.

And this alone could prove to be the trigger for a larger than normal directional move.

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YOUR ACTION PLAN

For most traders, this added monetary-policy volatility proves to be a very tricky situation to navigate. But for Catalyst Cashouts traders (like many of us), it sets up nicely for a SPY ODTE strangle trade.

Tomorrow, I'll be issuing this exact trade in our LIVE Catalyst Cashouts session - and you're invited to join us.

Sign up for Cashouts now - and you'll be ready to get this new trade live tomorrow at 2:00 PM EST.


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MONDAY MARKET MINUTE

  • 2024 Blue Wall Winners: Back-up power, solar power, and natural gas could be three winning themes from a Democratic win in November - which could lead to gains in names like First Solar FSLR, GE Vernova (GEV), and Cummins (CMI). Tracking
  • Golden number: Gold broke $2,600 for an all-time high last week, and silver is higher as well. We're getting positioned on metals plays ahead of the Federal Reserve's rate cuts in The War Room.
  • Next S&P Addition Pop? Last week, Dell and Palantir were added to the S&P 500 - and each stock responded with a +10% jump.
    • What might be the next stock to get the S&P addition bump? Possibly Trade Deck (TTD). To qualify, a company must have a market value of at least $18 billion, meet profitability criteria, and have a US domicile. TradeDesk is now one of the top names that meets these three thresholds - but is not yet included on the S&P 500 - which is why it's one of my top names to watch in Q4 '24.

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