The Worst Fed Day!

Trying to predict the market's reaction to a Fed announcement is risky, especially when we're down in the market rabbit hole when good news is bad news, and vice versa.

Here is how the market reacted to the Fed decision: a very positive response followed by a deadly deep dive to close the worst Fed Day!

For anyone simply betting on a bullish reaction, it was a heart-breaking day! I knew it would be foolish to bet only on one direction. So we bet on either direction and luckily a good reward bet! 😜

So now what? Well I think there is a good chance we will see a more deep dive for the market in the weeks ahead towards 3500ish, which may set up a nice bottom for a year end Santa Claus rally. But for the next few days, I think we may see a good oversold bounce. While the market had quite bad plunges for two days, the volatility was not shooting up at all. Instead, VIX was also coming down with the market. This is really weird and such kind of divergency usually leads to a market rally, although likely short-lived. Maybe the market is predicting a red wave for the midterm election and wants to celebrate it😂 For risk takers, this may be a short term trading opportunity betting on the upside.