To The Moon

U.S. equities sold off hard on Wednesday as markets digested the Fed’s latest policy decision. The central bank held rates steady at 3.50% to 3.75%, but the forecast is what moved markets. Under new Chair Kevin Warsh, the FOMC projected a year-end fed funds rate of 3.8%, a 25 basis point hike from current levels.

Warsh delivered a shorter policy statement, stripped out the usual forward guidance, and committed to a single mandate: price stability. No hints, no roadmap for the path ahead.

The market’s reaction was immediate. $S&P 500(.SPX)$ dropped 1.2% to 7,420.1, the worst reaction to a new Fed chair’s first decision day since 1994. $NASDAQ(.IXIC)$ fell 1.3% to 26,021.7. $Dow Jones(.DJI)$ surrendered an early record high to close down 1.0% at 51,492.6. $iShares Russell 2000 ETF(IWM)$ held up better than the majors, down 0.7% to 2,918.0.

Remember my study about changes in FED Chairs posted last month, everything is aligning. The special studies posted in the Market Intelligence Hub (access here) are a essential tools for long-term investors and traders.

Bonds moved fast and hard. The 2-year yield jumped 17 basis points to 4.2%, the 10-year added 7 basis points to 4.4%, and the dollar gained ground against major currencies on the back of the repricing.

Geopolitics pulled oil in the opposite direction. President Trump signaled a U.S.-Iran peace deal is close, one that would reopen the Strait of Hormuz to shipping. WTI crude has dropped to a three-month low at $75 per barrel, right at its 200 daily moving average. $SPDR Gold ETF(GLD)$ reversed after reaching our bullish target of 400.7 with precision 🎯, and Bitcoin reversed from the annual zone of $65,9K.

Rate-sensitive names absorbed the brunt of the selling. SpaceX fell 5.0% after reversing from the anticipated resistance of 225; last night I highlighted to subscribers the bearish conditions for $SpaceX(SPCX)$ and the implications of being below 207.5, with the bearish target of 189, which acted today as the precise support 🎯.

High probability Setups

9 of the 10 setups posted in the Weekly Compass were correct, 7 reached 🎯 their targets, 2 are ✅ on their way, just one was ● invalidated. 90% directional accuracy, 70% target accuracy, and it’s just Wednesday.

$JPMorgan Chase(JPM)$ : Bullish, targeting 329 (+3%), the 337 (+5.2%) extension included in the S/R levels was reached today 🎯.

$SPDR Gold ETF(GLD)$ : Bullish, targeting 400.7 (+3.7%). The top of the week was 402.4 🎯.

$Eli Lilly(LLY)$ : Bearish setup anticipated, targeting 1,115 (-2%); the close today was at 1,112 🎯.

$Alphabet(GOOG)$ : Bullish expectations targeting 370 (+3.5%), the high of the week was 373 🎯.

$Wal-Mart(WMT)$ : Bullish, targeting 122.7. (+1.4%) The top was 122.9 🎯.

$Amazon.com(AMZN)$ : Expected to reverse and reach 248 (+4%), it happened on Monday and Tuesday 🎯.

$Meta Platforms, Inc.(META)$ : The bounce was anticipated and set to 590 (+4.2%), target was exceeded 🎯.

$Apple(AAPL)$ : Bearish setup, price action is weak, aiming at the target for the week ✅ .

$iShares Russell 2000 ETF(IWM)$ : Expected to breach 288.8, move is in progress ✅.

$Microsoft(MSFT)$ : The only one invalidated, the bounce didn’t hold above 396.7, once it was lost capital was protected thanks to that reference ●.