Week Ahead: FOMC Rate Decision Hits Wednesday
Friday broke a three-day slide. SPY closed at $764.29, up 0.85% from Thursday’s $757.83. QQQ did the same thing, up 0.87% to $714.88 from $708.69. Neither move undoes the week that came before it. SPY opened the week near $773.17 on Tuesday, spent four sessions grinding lower, and touched $757.83 Wednesday into Thursday before Friday’s buyers showed up.
I don’t trade the bounce itself. I mark it. Friday’s close is now a line on my chart, the same as any other level — a place price stopped, nothing more. Whether it holds this week is the only question that matters, and the answer isn’t coming from a chart pattern. It’s coming from a room in Washington on Wednesday afternoon.
A Compressed Wednesday
The FOMC meets Tuesday and Wednesday this week. Wednesday, September 16, carries two releases that would each be a full trading day’s story on their own, stacked into a few hours. Retail Sales for August comes out at 8:30am ET. The rate decision, along with the Summary of Economic Projections — the dot plot — follows at 2:00pm ET.
I’m not going to hand you a Retail Sales number to expect. I don’t have one, and inventing one would be worse than saying nothing. What I do know is the sequencing: a real economic data point lands in the morning, and the committee’s decision lands in the afternoon, with roughly five and a half hours of trading between them where the market gets to react to the first before the second arrives. That gap is where a lot of people talk themselves into a position they didn’t need.
What the Market Has Been Weighing
Since Fed Chair Warsh’s Jackson Hole speech in late August, the pricing I’ve seen has been split — some of the market positioned for the Fed holding at 3.50%-3.75%, some for a 25 basis point hike. I’m reporting that because it’s the backdrop, not because I have a view on which side wins. My method doesn’t require me to have one. Price will tell me Wednesday afternoon, and I’ll still be reading the same chart I’m reading right now.
This is the part of the job that looks like doing nothing. Every voice on my feed this week will have a rate call. I don’t need one. The line I drew off Friday’s close doesn’t care what the dot plot says until price actually gets there and shows me what it does.
I used to think I needed an opinion on the Fed to trade around Fed weeks. That’s the old version of me, the one with 14 indicators open, trying to out-think a room of economists from a phone screen. It never worked. What works is treating the meeting as an input to price, not a thing I forecast separately from price. The committee will do what it does. My chart will move or it won’t. Those are the only two facts I’m allowed to act on.
Where I’m Drawing the Levels
SPY’s $764.29 close is the level I’m carrying into Tuesday. Above it, I’m watching whether buyers can push back toward the $773.17 high from earlier in the week — that’s still the level to beat before I’d call the slide over. Below it, $757.83 is the one that mattered twice already, once Wednesday and once Thursday. Two touches make it a real line, not a guess.
QQQ sits in the same spot relatively. $714.88 is Friday’s close and my working level. $708.69 was Thursday’s low and the floor that held into the bounce. I’m not adding new lines this week just because there’s a Fed meeting. The chart doesn’t get more indicators because the calendar gets more crowded.
That restraint is the entire discipline. A busy week tempts you to add tools — a second moving average, a volume overlay, something that promises to explain the Fed for you. None of it explains anything. Price at $764.29 either holds as support or it doesn’t. Price at $773.17 either gets reclaimed or it doesn’t. Every other line on the screen is noise dressed up as insight, and Fed week is exactly when that noise gets the loudest.
Tuesday and Wednesday Morning
Monday and Tuesday are the quiet part. I’d expect price to sit near Friday’s levels while the committee is in the room, and I’m not going to treat that quiet as a signal either way. It’s just the market waiting, same as I am.
Wednesday morning’s Retail Sales print is the first real test, hours ahead of the decision. If price reacts hard to that number, I’ll have a fresh level before the Fed even speaks. I mark it the same way I mark anything else — where did price stop, did it hold or break. Then I do the same thing again after 2:00pm.
The Only Rule That Doesn’t Change
I don’t pre-guess the committee. Not because I don’t have an opinion — because my opinion has never once moved the price, and treating it like it does is how you turn one Fed meeting into a hole in your account. The lines are already drawn. Wednesday will tell me which side of them price wants to live on. My job that day is the same as it is every other day: wait, watch the level, react to what actually happens instead of what I predicted would happen.
That’s the whole approach this week. No forecast, no rate call, no story about what the dot plot means before it exists. Just Friday’s close, two clean levels above and below it, and a Wednesday afternoon I’ll watch instead of narrate.
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