But the central bank did take historic action on Wednesday: It will begin undoing the extraordinary steps it took to prop up the economy for almost a decade after the financial crisis. The Fed said it would begin shedding some of the $4.5 trillion in investments starting next month.
Thiss announcement was made at 2pm — but as you can see below at 9:37am we issued a buy of QQQ puts – shorting the Nasdaq.
Usually I don’t like to put on risk before a Fed announcement, but because I saw a 5-wave sideways B-wave pattern – I decided to put on the trade BEFORE the Fed announcement.
It turns out the market dropped before the Fed meeting – and our short alert first thing in the morning was the right trade.
So the reason why I entered the put is because I saw the completed 5 waves followed by an a-b – that stopped at resistance at around 6010 NQ.
Here’s what the chart looked like without the text alerts.
After we took profits on the QQQ puts, we looked the short the SPY via puts.
We entered around 2496 ES – and exited perfectly at 2487 ES – near the low of that day.
Several members questioned why I was going long – it was definitely a gutsy call that also turned out to be correct – and our entry was near perfect at around 2497 ES – with the ES closing today at 2508 ES.
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