To The Moon

The Fed will announce its decision on interest rates at 2pm Beijing time on Thursday (June 16), with markets currently expecting a 75 basis point rise in June.

But I think this time the FOMC is more focused on monetary policy planning beyond July. After all, prior to this meeting, a number of Fed officials came out to communicate the 50 basis point forecast, and if the CPI data is changed, then such market communication will be meaningless.​

Historically, if rates rise by 75 basis points or less, the market has a good chance of bottoming out. So Wednesday is likely to close higher.

The question is what happens after the rally?

On May 4, the day the Federal Reserve announced its most aggressive monetary tightening in nearly 22 years, the S&P 500 posted its biggest one-day rise in interest rates in 44 years. However, this was followed by a half month long sharp decline, which found support near the weekly 120 moving average.

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But expectations are different this time. The stock index was sideways before the announcement of interest rate hike in May, and the tightening monetary policy was completely unexpected in the market.

Before the FOMC meeting, the market fully realized the rate hike expectations, falling nearly 10% in a row. So is it possible that the market will rebound smoothly after this disclosure?

Just as I was considering this possibility, I found a bulk option order on Tesla：$TSLA 20230120 500.0 PUT$

Put orders with a strike price of $500 totaled $14.81 million.

Where is the strike price 500? Right on the 5 - year moving average.​​

For the$S&P 500(.SPX)$ , it's about 3600.

Options on other tech giants, such as Nvidia, have also found such bulk order: $NVDA 20220715 135.0 PUT$

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The$Cboe Volatility Index(VIX)$ is now back at 31 and could explode again, so I'm buying PUT this time on the FOMC.