Transcript of Tomorrow Will Be Insane: Major Interest Rate Decision
StockedUp
0:00The Fed is now overwhelmingly expected0:02to raise interest rates tomorrow with0:04markets pricing in a 92% chance of a0:06hike. Diesel hit a record high and oil0:09is pushing towards $110 a barrel after0:12Saudi Arabia suspended loadings at its0:14main Red Sea port after another Houthi0:17attack. The 10 and 30-year Treasury0:19yields just hit their highest level0:21since 2007. Today we cover why stocks0:24are falling, what to know, and where the0:26action is right now.0:32Nearly every major bank is now0:34forecasting a rate hike tomorrow with0:36most expecting two rate hikes and some0:39even expecting three all within 2026.0:42Goldman believes it could be closer to a0:45oneanddone move rather than the0:46beginning of a larger hiking cycle as it0:49expects inflation to drop going forward.0:51The Fed interest rate decision is set0:53for tomorrow at 2 p.m. Eastern time with0:56Fed Chair Kevin Walsh set to speak at0:592:30 p.m. Eastern time. One thing that1:01many traders are forgetting though is1:03that the Federal Reserve's dot plot will1:05be released tomorrow alongside the1:08interest rate decision, which may be1:10even more important than the rate1:11decision itself because it will show1:13where the 19 Fed policy makers expect1:16interest rates to go from here. And the1:18Fed watch tool is now showing a 92.3%1:22chance of a rate hike at the meeting1:24tomorrow. So, make sure you're watching1:26closely and you don't miss it as it1:28could have some big effects on the stock1:30market. But rate hikes have historically1:33been damaging to stocks in the short1:35term. But there could be some good news.1:37Across 18 rate hikes since 1946, the S&P1:41500 saw stronger forward returns when it1:44was within 5% of an all-time high, which1:46it is right now.1:48And the one-mon return was still shaky1:50though, so there may be some craziness1:52in the short term to keep in mind. And a1:55rate hike isn't going to fix the crude1:57or diesel shortage, though, which is1:59what's pushing the Fed into this2:00position in the first place. The 10-year2:03and 30-year Treasury yields just passed2:05above 5.04%2:07and 5.4%,2:09their highest level since mid 2007. The2:13surge in bond yields has also gone2:15global. Yields have climbed to levels2:17last seen in 1998 in the UK, 2008 in2:21Germany and France, and 1996 in Japan.2:25There's only one major exception, which2:27is China, whose borrowing costs remain2:29near record lows. The rise in yields2:32pushed the 30-year mortgage rate to its2:34highest level since January of 2025 at2:377.17%,2:39and US homes are now the most2:41unaffordable in history. Saudi Arabia2:44suspended oil loadings at its main Red2:46Sea port following the East West2:48pipeline attacks earlier this week. And2:51this port, Yanbu, exported up to $52:54million barrels per day. So this2:56disruption caused Brent crude to push2:57higher towards $110 a barrel. US Energy3:01Secretary Chris Wright says the pipeline3:04closure should only last a few days3:06though. But the Houthis launched another3:08round of missiles and drones across3:10Saudi Arabia late on Monday, wounding 133:14civilians across three cities. Saudi3:17Arabia officials promised a firm3:19response in retaliation to these3:21attacks, though. The oil shortage is now3:24also reaching other products with Costco3:26now limiting members to just two units3:28of motor oil per week, which is pretty3:31unusual for a retailer known for keeping3:33high volume essentials consistently3:35stocked. It may just go to show how far3:38these supply pressures are beginning to3:40spread. Costco's Kirkland synthetic3:42motor oil also jumped in price to3:44$57.99,3:47up from roughly $30 normally. That's3:49almost double. And diesel also just hit3:52a record $6.26 a gallon, up from nearly3:56$3.50 a gallon since January. This AI4:00safety debate though has been the talk4:02of the week and it doesn't look like4:04it's slowing down anytime soon. Elon4:06Musk is calling for OpenAI, Anthropic,4:09Google, Meta, XAI, and several leading4:12Chinese AI companies to test each4:14other's models before they're released4:16to the public. Musk said that instead of4:19companies grading their own homework,4:21this initiative would help competitors4:23identify potential safety concerns.4:26AI stocks attempted to bounce back4:28today. Some finished green like AMD,4:31Dell, and Qualcomm, but the sector still4:33remained mostly choppy. We'll talk about4:35this in just a minute as we cover4:37today's setups and predictions. But with4:39the stocked up giveaway officially being4:41over, we want to give a huge4:43congratulations to the three people who4:45won. Dragon, Tomato Man, and Static4:48Options. Huge shout out to you guys and4:50congratulations. Uh even though if you4:53are not one of these three people, even4:54though if you didn't win, make sure to4:56join the Stockup Discord because we're4:58going to host more of these in the4:59future. You can connect with a bunch of5:01people who trade, access a bunch of free5:03resources, and much more. It'll be that5:06first link in the description and5:07comments down below. So definitely check5:09that out. But Tom, looking at the market5:12right now, the S&P 500 is 2.82%5:16off of all-time highs. What do you see5:18on the charts? Of course, heading into5:20the FOMC day tomorrow, we ended up5:23seeing the spy pull back again today. It5:26closed down in the red by 0.46%.5:29And whenever we look at the spy over the5:31past few weeks, the downtrend is still5:33in play. Now, the spy tried to break5:36officially out of the downtrend line,5:38but we can see that ever since it broke5:40that line, it has not really sustained5:42any upwards momentum. But one positive5:45sign for the bulls is that the key5:47support is still holding up around 7565:50to 75650. Uh this was actually the low5:53last Thursday and of course is coming5:55back into play here. Now if we see the5:58FOMC event tomorrow or even like a runup6:01into the FOMC event, we start to see6:03this support level start to break down.6:05I will be watching for some bearish6:07price action with the spy. uh if there6:10is a breakdown there, there is some key6:12support coming up around $750.6:15That will be the next major level to6:16watch for upon a breakdown. Although 7526:20is pretty big on the way down as well.6:22But if this support ends up holding up6:24and the SPY ends up bouncing to the6:26upside, I think that really re-reing6:28back above the high from Monday around6:31763506:32is going to be very important. 76350 is6:36of course like I said the high from6:37Monday and it's also right around the6:39gap fill from Monday too because there6:41was a big gap down into Monday morning.6:44I think that that would show a lot of6:45bullish pressure into that event6:47tomorrow or even following it. So keep6:49those levels on the radar. SPY has been6:52very choppy the past few weeks and I6:54really hope that we start to see a6:55better direction come into play after6:57this event tomorrow. It was almost7:00exactly a month ago when the S&P 500 was7:03at record highs and it certainly has7:05been downtrending pretty consistently7:08ever since. Historically speaking, the7:11market is relatively weak on rate hike7:14days. We can see going all the way back7:16to 1946, uh, it has only been positive7:1938.9% of the time and the average7:22returns have also been red. Of course,7:24that doesn't mean every time the Fed7:27hikes rates that the market falls7:28because there have been a handful of7:30times where the market finished green7:31and pretty strongly green as well, but7:34you know, of course, there have been a7:35handful of times that were pretty red.7:38On average, it is net negative for the7:40market, especially considering that the7:42market does have, you know, positive7:44average returns just in general. So,7:47keep that in mind. And of course, while7:49it appears to be extremely likely, there7:52is not a 100% chance that the Fed is7:55going to hike rates tomorrow. So keep7:57that in mind. But another thing that's7:59super interesting is that there is8:02weirdly zero demand for NASDAQ put8:05options right now. This chart shows the8:07average one-month normalized put to call8:10skew of individual NASDAQ 100 component8:13stocks, and it's near its lowest level8:15in 20 years. So investors aren't really8:18expecting tech stocks to fall. Yeah. And8:21that's pretty insane to say, especially8:22following some of these comments from8:24Elon Musk, Sam Alman, and other huge AI8:28CEOs over the past couple of days. So,8:30I'm going to keep this in mind going8:32forward. But let's go ahead and check8:33out the earnings calendar for the rest8:35of the week. It is pretty light. So, I8:38think we'll just go ahead and jump right8:39into today's setups and predictions. And8:42with my first one, I'm actually looking8:44at MU or Micron to the downside. So MU8:48slid very hard on Monday morning. And we8:51can see that it it actually had a pretty8:52large gap down as did a lot of AI8:55stocks. Of course, there were comments8:57by Sam Alman, Elon Musk, and Daario8:59Emodi calling for the deliberate9:01slowdown in frontier AI development,9:03pretty much citing safety risks. But the9:06drop was further magnified, of course,9:08as treasury yields continue to rip above9:115% and traders are growing increasingly9:14cautious ahead of this week's FOMC9:16decision. So, I'm really still looking9:18for MU to drop further into the end of9:21this week. Of course, tomorrow's FOMC9:24move is going to make a big difference9:26on almost every short-term trade. So,9:28keep that in mind. And there is a big9:30resistance on MU in the short term9:33around 945 to 950. uh just past there,9:36there's another key resistance where MU9:39will fill the gap to the upside up to9:41around $970.9:43Those are a few levels that I'm watching9:45for over the next couple of days for a9:47potential bounce back down. I could see9:50the price action kind of shaking out9:52kind of like what I'm drawing out here9:54or we even just uh reject tomorrow with9:56the FOMC decision and continue lower.9:59But I am worried about these tech stocks10:01and I think that we could start to see a10:03further sell-off ensue. Even though they10:06bounce back slightly today, they are10:08still well below Friday's levels. And MU10:12is still up roughly 200% year to date10:15and 487%10:17over the past year. So it is still10:20pretty elevated in a broader sense. And10:22we can see investors are reacting to10:24this recent news given the big gap down10:27on Monday like you pointed out. So yeah,10:29very interesting. Another stock that's10:31close on watch is XLE. I know we've been10:34mentioning this a lot and we're really10:36early to this trade and while it may10:38seem boring in some senses, oil10:40companies are benefiting tremendously10:43from what is happening in the Middle10:45East right now and with gas prices10:47continuing to rise and with the conflict10:51in the Middle East appearing to worsen,10:53especially given the recent developments10:55in Yemen and Saudi Arabia, it appears10:57that oil companies may continue to11:00benefit going forward, which I'm not11:02surprised. why XLE is continuing to push11:06near recent highs. It is still on my11:08bullish radar and um it the price action11:11has been great over these past few11:12months. Yeah, XLE pulled back a little11:15bit yesterday and I feel like every time11:17we get a very minor pullback with some11:19of these energy plays, people start11:21calling for them to crash and burn, but11:23the situation in the Middle East is not11:25ending right now, at least anytime soon.11:28And Trump even said that it's not going11:29to be ending until after the midterm.11:32So, that's a pretty uh pretty long11:33outlook there. But for those of you that11:35think that we forgot about mentioning11:37the crypto market and the Clarity Act11:39today, well, we didn't. Here you go. The11:42Senate blocked the Clarity Act on11:44Tuesday after a motion to proceed11:46tallied only 50 votes in favor to 4911:49against, falling well short of the 6011:52votes required to pass uh a bill within11:55the Senate. Even with newly revised11:57ethics provisions aimed at stopping11:59public officials from profiting off12:01crypto projects, Republican sponsors12:03failed to win enough Democratic support12:05to move the legislation forward. The12:07failed vote stalls months of bipartisan12:10negotiations on Capitol Hill and deals a12:13substantial blow to the digital asset12:15sector's push for a clear federal market12:17framework. And guess what? Well, crypto12:20stocks ended up falling today. Bitcoin,12:23Coinbase, IBIT, MSTR, uh, almost all of12:27them pulled back and a lot of them12:28pulled back under some pretty large12:30areas of support as well. And Coinbase12:33is approaching some large areas that it12:35tested at lows today. And if we continue12:37to see negativity with the crypto12:39sector, I will be looking for a further12:42breakdown of this support zone around12:44168 to 170. continue watching these12:47stocks very closely as this legislation12:49and any updates could end up coming into12:52play in a pretty big way. I would not be12:54surprised if we started to see uh12:56Bitcoin, Coinbase, and a lot of these12:59crypto stocks also pull back because13:01they recently had a major explosion from13:04lows. Bitcoin popped to highs around 42%13:07within just a couple of months. And I13:09would not be surprised if it13:10consolidated in this lower zone a bit13:12more before finally coming back to the13:14upside.13:16>> Another stock that's still close on13:17watch is Dell, ticker symbol DL. This is13:21Dell Technologies. They're a company13:23that has also benefited tremendously13:25from the uh big AI buildout. And as we13:29know over the past week there was that13:31odd um agreement between Elon Musk, Sam13:35Alman, Daario Emodi and others calling13:38for a slowdown in the AI industry with13:42Dell being up so much and with the13:44relative weakness near its record highs.13:47I do still like the riskreward playing13:50it to the downside. In the worst case13:52scenario where this news just kind of13:54gets ignored and AI stocks keep pumping,13:57then I think it can just be a relatively14:00small losing trade. But in the event14:03that AI stocks do sell off, whether it14:06be directly from this news or even just14:09general market weakness, I do think14:11there can be a pretty substantial14:14riskreward.14:15um especially with some of these14:17companies that are pretty overextended14:20with Dell. I wouldn't be surprised if it14:21got back to that $400 level or below14:25over the coming weeks and months. I do14:27think it would take some time. Of14:29course, it all depends on how the news14:30plays out, but it's a stock uh on the14:32radar. Yeah, it's very interesting14:34whenever we see some of these stocks up14:37like well over 300, 500%, sometimes even14:40thousands percent over the past year.14:42So, I'll be watching it closely, Mike,14:44and keeping it on the radar as well,14:46just like MU. But besides that, let's go14:49ahead and jump into today's momentum14:51plays. And these ones are pretty fun.14:53With the first one, I'm looking at14:54ticker symbol XOM or Exxon Mobile to the14:58upside. A lot of these oil companies15:00continued moving higher with energy15:02today and ZAM is right on key15:04resistance. So, if it can break above15:0616965,15:08continue watching it to the upside. With15:10the next one, we have Crowdstrike,15:12ticker symbol CRWD, also to the upside.15:15Crowd Strike has been on fire and people15:18have been raving about cyber security15:19stocks lately. If Crowdstrike breaks out15:22above 244, look for the upside15:24continuation move. And then with the15:26last one, we have Energy Fuels, ticker15:28symbol UU,15:30to the downside. Yeah, a lot of these15:32nuclear plays have been selling off hard15:34over the past week. If UUU drops down15:37under $11.70,15:39look for the downside continuation play.15:42These three stocks are on the radar for15:44potential continuations tomorrow if and15:46only if they break through the levels15:48listed. These stocks are volatile, so15:50always protect yourself. Use stop-15:52losses. Know why you get into any trade15:54you ever enter and focus on what15:56matters, which is making smart,15:57disciplined trading decisions. Let's16:00also jump right into today's $5.516:02million big money trade. Today we are16:05looking at ticker symbol Ver A. The16:09trader here traded the 35 strike put16:12options that expire on January 15th of16:152027. This stock had some wild movement16:18today and it is a biioharmaceutical16:20company focused on developing and16:23commercializing transformative16:25treatments for serious immunological16:27diseases. These types of stocks are16:30extremely volatile and with a large16:33trade like this, of course, it can be a16:35trader position themselves to benefit16:38from the stock falling substantially.16:41Whether that be due to they have some16:44inside information that you know maybe16:46the company isn't doing as good as it16:49seems. Maybe there might be some bad FDA16:53news that might be coming out or maybe16:55it's just an existing shareholder buying16:58insurance to protect their position. Of17:01course, it's impossible to know with17:02100% certainty, but it is an interesting17:04trade and these types of stocks can move17:06a lot.17:07>> Yeah, they definitely can. And like17:09whenever we look at a stock like Ver, it17:12has been pulling back pretty hard ever17:14since the beginning of 2026 and the end17:16of 2025 and you know they did have some17:19news come out today with uh some17:22positivity with one of their kidney17:24drugs. But we can see that it had that17:26crazy reaction early on where it almost17:28had that like buy the rumor, sell the17:30news type of event where after the uh17:32after the market opened, we got a huge17:34sell-off come back into play and that17:37could have been priced in. And you know,17:38traders could be uh looking to play this17:40stock to the downside. And I find this17:43very interesting being the 35 strike.17:45It's right around the money. And if we17:48do continue to see this stock drop and17:50VRA ends up breaking down under its17:52recent low around $30, uh we could see17:55this play uh play out very well. We can17:58see that, you know, over the past year17:59it has been downtrending pretty hard. So18:02I'll continue watching for this18:04downtrend to continue to play out. And I18:06would even say if it starts to fall down18:08towards that recent low, I would take18:10some profits early and then look to ride18:12the trade out and scale out of this one18:14because uh you know, you don't want to18:16necessarily hold around support for too18:18long.18:19>> Let's keep it close on the radar. And if18:21you are new to the channel, welcome and18:23consider obliterating that subscribe18:25button. For every single trading day, we18:27post brand new videos just like this18:29one, showcasing crazy multi-million18:31dollar big money trades, stocks that18:33keep on the radar, the most important18:35news, upcoming events, information, past18:37stats, and so much more. It takes a long18:40time to make these videos each day. And18:42if you subscribe, you'll get them18:43recommended to you more often. So,18:46definitely consider doing that. And18:47let's also give a giant shout out to18:49today's member of the day, Bavesh in the18:52Stocked Up Discord, who had some nice18:54profits yesterday with some MU put18:56options. Huge shout out to you. Keep up18:58the great work going forward and it's19:00awesome to see posts like this one.19:02Tomorrow is set to be a big day. Thank19:04you all so much for watching and let's19:06crush it in the market tomorrow.
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