May 7 PowellBall

It's what the market has been waiting for. What's jpow going to say? Which is silly because the market knows what he's going to say... There's a 97.7% of no change to rates and a 2.3% of a rate cut. So, we know what he's going to say. The rate decision comes out at 2pm and we'll have insane volatility, just because the clock hits 2p. Then even more volatility at 2:30pm when JPow hits the podium and his full speach is released. Then continue to be wild fluctuations because the tone in which he speaks the pre-released speech might give the market a hint.

Basically, the markets gonna market. We've had painful consolidation / sideways action between 5600 and 5700 on SPX since May 1. AND, stuck between 5640 and 5600 in the last two days. Things are coiling for a big move.

The fed "decision" will be the catalyst that releases the spring.

As I do on FOMC Wednesday. I don't trade the morning. There is usually extra low volume and plenty of opportunities to get chopped up and completely lose all mental and financial capital to properly position for the volatility.

Zooming in a bit, the tightening is clearer. What's also apparent, is that as we are making equal lows in price, we are making higher lows on the stochastic. Same low price, increasing, almost positive momentum.

The higher timeframes of the Daily and 4h chart concur with a slightly positive bias. The ribbon is flipping, the ribbon is holding. I'm still open to and aware of a plunge down because we haven't properly put in a higher high on the daily. I could also see the volatility sending us very quickly to the bull gap below before ripping and vice versa - probing above the recent high then tanking.

I will not predict though. I will have an action plan for either scenario.

Here it is. No real direction. Slight lean to upside given the bullish divergence on the stochastic, and higher time frames flipping bullish. Just because my bias is up does now mean we can't tank first, or tank fully. It just means when in doubt wait for support to take calls. There can easily be a situation that justifies puts, but from resistance or broken support turned resistance. It will be less beneficial to rely on EMAs 2-3pm because they've been so skewed by the sideways action.

Lots of arrows I know. Today (and yesterday's) range is stuck between the call trigger and yesterday's close. I'd like to see a meaningful breakout of either level, and enter on a retest for confirmation. But, I will be extra patience when confirming a retest given in a highly volatile time period these level breaking moves could just be liquidity grabs before heading the other way.

Tricky. And because it's tricky I'll be extra patience. There's no need to put my capital at extra risk because there's greater volatility. Typically I trade 0dte's given the decrease capital required with only 2 hours left in the day, and the outsized return given the greater likelihood of massive moves.

But, the volatility can be better weathered with more time so I will stick to 1dte until the last 20 minutes, only with a small portion of any profits made earlier.

I will be extra patient. I will be okay 'missing' trades. I will be content watching the volatility.

Happy Powellball.