To The Moon

the first Fed meeting of the year is coming, and it is customary for the Fed not to announce interest rate increases outside quarterly and monthly meetings, so the focus of market attention is generally on the policy wording after the meeting.

Since the market has fully expected the interest rate hike in March, and there are sufficient pricing for the interest rate hike from 3-4 times to even 7 times, theoretically speaking, if the Fed is just a lip service, it will have little impact on the market. But given the current high inflation expectations, will the Fed's interest rate meeting be unexpected and raise interest rates ahead of schedule?

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​First, the US stocks that "die for you"

This year's US stocks started unexpectedly weak, and it is hard to imagine that the expected interest rate hike will have such a strong impact on US stocks. However, other commodities have turned a blind eye to interest rate hikes and continued to rise, especially crude oil. The Biden administration's high-profile suppression and the Federal Reserve's suppression failed to prevent oil prices from rising, but crude oil has reached new highs. That means that the market believes that raising interest rates will not help to suppress inflation, but will hinder economic recovery. This is completely contrary to the expected result of the Federal Reserve. Raising interest rates and shrinking the table will impact the economy, so US stocks will fall to respect first, and may even affect the wording of the Federal Reserve's interest rate meeting in January.

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​Whether to save the stock market or not is a question. When falling through the New Year line, US stocks are usually accompanied by a wave of intermediate adjustment, while the current position of S&P in the New Year line is around 4300 points, so whether it can resist depends on the results of the interest rate meeting. Friends who intend to bargain-hunting oversold and rebound can be laid out near this position. Since 2022 is a year when global stock markets are prone to resonance, it depends on your preferences whether you will rebound or not.

Second, "ready to break through" gold?

The forward-looking post last two weeks discussed the trend of gold with everyone, and now it has come to a critical point.

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​Is it high before breaking through the challenge? Or sink again? It is estimated that it depends on the result of this meeting on interest rates. doves break through and rise, while hawks fall in the direction of hardline hawks. I don't have any expectation of the direction here, so strategically, you can double buy options to gain a better direction. Moreover, after the direction is determined this time, it is estimated that the trend will be maintained until March, so friends who like to do gold must pay attention to it.

Third, beware of forced crude oil

At present, the price difference between WTI crude oil contracts has been relatively wide, and the price difference between 0 and December contracts is 10%. The historical extreme value can be as high as 20%-30%, but it usually occurs in the context of extreme events and wars. Will the current relationship between the United States and Russia and Ukraine heat up to this stage? At least everyone should be vigilant. Of course, the result of forcing positions is not to rise blindly. Once the incident subsides and reverses, the price will plummet rapidly in reverse, and turbulence is indispensable.

​$E-mini Nasdaq 100 - main 2203(NQmain)$   $E-mini S&P 500 - main 2203(ESmain)$   $Gold - main 2202(GCmain)$   $Light Crude Oil - main 2203(CLmain)$