The Fed is set to announce its next rate cut decision, and traders everywhere are eager to see how the market will react. Whether it’s 25 or 50 basis points, the impact on the stock market could be significant. In this blog post, we explore what traders should watch for, key levels on major indices, and the best stocks to keep on your radar.
Understanding the Fed’s Impact on the Market
A rate cut usually signals that the Fed is trying to stimulate the economy, but the market’s reaction can vary widely. Sometimes, the announcement can trigger a rally, while other times, it can lead to a sell-off, especially if comments from Fed Chair Jerome Powell signal economic concerns.
Key Levels to Watch
- QQQ: Look out for support and resistance zones around 470 and 468. These levels could determine if the breakout continues or if the market will pull back.
- SPY: A crucial level is the 228 area; a break above could mean further gains, but resistance is strong here.
- IWM: The small-cap index has been on a 6-day run, but resistance looms near 225-228.
Top Stocks to Watch
- Upstart (UPST): Just had a secondary offering but the market absorbed it well. Watch for a breakout above 40.
- SMTC: A key player on the verge of breaking out from a solid base.
- Meta (META): Setting up for a potential breakout to all-time highs.
- Tesla (TSLA): Mixed signals but worth watching if it can break key levels.
Conclusion
The Fed’s decision will have a significant impact on the market, but traders should be prepared for anything. Keep an eye on key levels and be ready for the shakeouts that typically occur on Fed days. Trading isn’t about predicting the market; it’s about reacting strategically.
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