3/20/25 Live Trading Room Market Recap & Trades

Mind The Chop

Apologies for missing my daily ditty Wednesday, but it was Fed Day and I ran THREE live webinars - my normal live trading room in the morning, in addition to the afternoon FOMC release and Powell presser, before delivering our weekly Macro-To-Micro OPTIONS Power Hour after market close with (surprise) guest presenter, Jason Delorenzo of Vol.land. Hans had to bow out and that meant I had to scramble to fill his spot. Jason had interviewed me on his show just Monday morning!

So I returned the favor and luckily Jason was willing, ready and able to jump in! He is a true quant geek with truly quanty-geeky tools for sophisticated option flow analysis. This is not your typical retail Cheddar flow that is usually done poorly but consumed by the retail masses for “unusual option flow”. These tools measure the actual dealer and institutional flows behind the hedges & positions that actually move the market.

Fed “Uncertainty”

On the surface, the FOMC decision was deemed dovish as the (expected) decision not to cut was matched with the (intonated in Jan FOMC minutes) decision to slow their QT of the Fed balance sheet by $5Bn/month starting in April - day before Trump’s reciprical tariffs are slated to go into effect. The hawkish stuff was buried:

• updated SEP used the word “uncertainty”

• 8 members expecting 0-1 rate cut only

• committee was near unanimous on risks to higher unemployment

• Fed sharply reduced 2025 growth projection

• 18 of the 19 members see upsdie inflation risks

• the diffusion index showed a threat of inflation higher than at the peak in 2022 (chart via Anna Wong of Bloomberg)

Even more reasons why I see this market more like 2022 than 2023-2024.

TRADE UPDATES

My call Wednesday morning was that unless the Fed announced a “QT PAUSE” then market would most likely fill one intraday hourly gap on the upside before filling the other on the downside potentially by Friday… but next week more likely.

So far so good…

XLF - in follow up to the trade rec’d at 47.25, with 49.16 PT with overshoot to 50… it’s done. Option flow reads bearish.

GILD - warning that 120 was big resistance and would likely pullback to 109 was updated to 106.43 with overshoot to 103. Almost there.

META - chase > 592 into 608.88 worked perfectly today. And so did the rejection ;)

BIDU - Tues tag of 104 warning that a pullback was due the China plays was also well timed. I got some nice mentions this morning on my warning that caused you to sell calls/protect - good job. BABA, FXI, KWEB also lower today.

EWG, SAP, DB - also warned of digestion in the EU rotation and EURUSD likely digesting below 1.09 also kicked in today. EURJPY looks very weak.

VVIX & VIX - both made it back to 92.24 & 19.61 so this is where we need to get back above for market weakness to kick in.

ACN - earnings disappointed pre-market, but not those already swing short $100 dollars higher! From Feb 22:

ACN - so much meat left on the bone short - so much

and Feb 28th:

ACN - is a big contractor to US, so this looks like a good short - as long as the bounce keeps it below 360 - for a drop into 328 then 310 to start.

My next big swing short is a very well-known name… we will discuss tomorrow morning!

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