I Hope you're watching this in time I Very much hope you're watching this in time because the remainder of the trading week is gonna get Gnarly it's gonna get squirrel crazy. It really kind of all starts with the FED On Wednesday July 26th we are going to be getting the Fomc decision. Yes, most likely we're going up 25 bips with about a 99 chance of that happening bringing us from five percent to 5.25 So you might be thinking to yourself, well if we already know that why is the market going to be crazy, it's all going to come down to what Daddy Pal, the Chairman of the Fed, the Chief of the Central Bank depends on what he decides to say at his 2 30 PM ET press conference once again on Wednesday July 26th Who wants to keep hiking rates and who doesn't Breaking down the Fed's views I Don't know what birds fighting has to do with the FED but it does have to do with the Fed. The Federal Reserve is reaching a pivotal moment in the fight against inflation.

After more than a year of solid agreement that higher interest rates were needed, differences among policy makers have started to to deepen as they weigh when to stop hiking and how long to keep rates elevated. The participants of the Fomc are clustered into three main groups: The Hawks are ready to tighten policy and are on the sharp lookout for inflation. The doves are inclined toward easy policy that favor job creation, and finally, the centers are seeking a happy middle ground kind of like a Goldilocks situation. The increasing split between them is clouding the outlooks for rates and threatens the unity of Fed chair Jerome Pal has maintained during the tenure, which in turn could undermine the Central bank's credibility on inflation and Communications with investors and the public if I'm thrown out.

My guess right now: this is how it's going to go down. We're going to get 25 bips tomorrow, that's going to be the announcement on Wednesday and then they're going to give us some line of hey, we don't know what we're doing for the next ones, we're going to interpret the data as it comes if inflation remains sticky AKA stubbornly High We're gonna get another 25 bips. But if we continue in the downward Trend that we're currently in right now I mean we've come from nine percent all the way down to three. And granted, we're not at our Target of two, but we are trending down, they might just kind of pause that type of a thing.

So I think they're gonna use the verbiage around pause or skip that type of thing rather than oh, we're gonna keep going or no, we're definitively done. I Don't think they're gonna really tie themselves to anything, but for those of you who are curious: Waller is one of the biggest Hawks Uh, he. Basically, that means he wants to keep raising interest rates to fight inflation Jerome Powell's in the middle John Williams in the middle And then we do have some doves. uh, like Austin Goldsby who's basically saying no, we should have already been cutting.

So obviously a difference of opinion I think is healthy to have because we all view the economy in the market differently. But the fact that we're getting closer to a goal almost picture a giant ship and momentum and the ship is driving in the water and well, the argument's like, well, when do you stop to kind of Coast into where you want Obviously for the main voyage, that's easy. like you just know you're going across the ocean. The question is, when you're coming to the Terminus when you're coming to the end, what's the best way to kind of pull off what you need to? You don't want to undershoot it because you got to get to land, but you want to overshoot it or you're going to be crashing into land.

So that's this whole concept of a soft Landing of will we be able to like smoothly Coast right into where we want without really overdoing it. But obviously if we under do it then we're not going to take care of inflation. This is important. It's what to pay attention to.

and I do want to remind everyone that I can make a whole video on this later. the market historically from the 50s or 60s all the way up until now. whenever the FED starts cutting rates, that's actually pretty bad for the stock market. The correlation between the FED cutting rates like from the first cut all the way to when they're done with that I mean generally we've seen on average a 30 or 40 percent sell-off and obviously granted, that's over a considerable time.

It's not like it happens overnight, but I just want everyone to know that when you hear a rate cut like if we start doing that, your mind should not be thinking bullish by any means. At least if history has this, like to tell us anything. So as of now for tomorrow, Wednesday July 26th there's a 99 chance that we're getting a 25 Bips rate hike and as of now for the next Fomc meeting on September 20th, there's an 81 chance that the Fed rate remains unchanged, so just wanted to know that and as of now, a 20 chance that it is actually a whole another 25 bits right hook. If we go out to November you can see the odds starting to change a bit more and then if we get to December I don't think any of these are currently pricing in ooh, they are as of now end of the year December 13th there is a six percent chance that maybe we're going to be back to five percentage points when it comes to the FED fund rate.

So I want to share that with all of you, But I also want to share. The hottest trade in equity options is spreading to Commodities So the world of being a D Gen has been working out pretty nicely. It's been popularized in the world of retail and apparently it's picking up steam and popularity everywhere else come. Quality investors are following a hot Trend in equity training, using short-term options to bet on events from jobs and crop reports to OPEC meetings.

Trading in commodity contracts that expire weekly jumped an average of 30 annually over the past three years. Volumes were led by a 50 average increase a year in energy in the 2020 to 2023 period, followed by metals and agriculture. So basically everyone's going YOLO on. Black Gold I'm talking about oil I'm talking about group.

The shorter term Commodities Trading follows the rise in equities of zero day to expiry options that now account for more than 40 percent of total volume of contracts tied to the S P 500 Index More than 40 percent, folks. I Think we have a problem. While there's no interest at this point in zero-day commodity options, the weekly contracts that allow traders to hedge specific event risks have started to gather. Steam And right here you can see AG you could see gold, silver.

The amount of options like it's just popping. Popularity is getting massive here. Trading in weekly metal options set five monthly records already in 2023, and Energy set records during four months. Weekly options traded in in all markets now account for 26 percent of volumes transacted so far in 2023, up from 18 in 2020.

The share of Commodities is still small at just five percent of the total 2023, but up from three percent. So the way to interpret this is: across the board. People are getting more degenerate and I have to admit I'm here for it. It's incredibly stressful.

It's incredibly tough to pull off to continually grow at a nice, healthy, reasonable rate. And I don't mean just in your P L. I also just mean your mental sanity. So I guess here's cheers to all the degenerates and let's see how things play out.

not only with the upcoming earnings, but we also have the Fomc decision. We have the inflation. With the Pce report, there's a lot going down and I don't see these crazy YOLO options trading slowing down anytime soon.