1. What Actually Moves Markets on FOMC Days
The market does NOT move on the rate decision alone. It moves on the delta between expectations and reality, which comes in three waves:
Wave 1 — 2:00 p.m. ET (11:00 a.m. PT)
FOMC Statement + Dot Plot + Policy Language
Markets react instantly to:
• Change in rate (expected today: no hike/no cut)
• Dot plot:
o More cuts than expected this year → bullish
o Fewer cuts → bearish
• Shift in policy language:
o “Inflation has eased further” → bullish
o “Inflation remains elevated” → bearish
o Removal or softening of “additional policy firming” → bullish
Wave 2 — 2:30 p.m. ET (11:30 a.m. PT)
Powell Press Conference
This is usually the BIGGER move because Powell often contradicts the initial market reaction.
Key market-moving cues:
• Tone: Dovish (easing bias, confidence inflation cooling) → markets rip
• Tone: Hawkish (uncertainty, sticky inflation) → markets dump
• Mentions of:
o Labor market softening
o Financial conditions
o Timing/pace of cuts
Wave 3 — Market Reversal Window (2:40–3:00 p.m. ET)
Almost every FOMC day sees an initial fake move followed by a violent reversal, then the true trend into the close.
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2. What You Should Trade
As a scalper trading options and directional moves, prioritize:
Primary Trading Vehicles
1. SPY / QQQ Options (0DTE)
o Best liquidity
o Tightest spreads
o Huge gamma
2. Futures
o ES (S&P 500)
o NQ (Nasdaq)
o MNQ/MES (micro contracts for precision)
3. High-Beta Leaders
o TSLA
o NVDA
o META
o AMD
o AAPL
o AMZN
These names amplify market direction and offer clean 1–3 minute scalps.
Volatility Trades
• VIXY, UVXY (volatility spikes → good for reversal trades)
• If Powell is more dovish than expected, VIX collapses → these dump hard.
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3. Pre-FOMC Setup (Now – 11:00 a.m. PT)
Mark Your Key Levels
For SPY/QQQ:
• Overnight high/low
• Pre-market high/low
• VWAP
• 1-hour EMA 21
• Yesterday’s high/low
These are the levels the algorithms anchor to.
Expected Market Behavior Before Announcement
• Tight chop
• Low volume
• Failed breakouts on both sides
• Market drifts toward max pain levels for options
→ Best not to trade size until after 11 a.m. PT.
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4. What Will Make Markets Spike Up or Flush Down
Below is your directional decision matrix.
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A. Bullish Market Reaction (Risk-On)
Expect a rip higher if:
In the Statement:
• “Inflation has eased further”
• “Committee expects to begin reducing rates this year”
• Dot plot shows more cuts than expected
In Powell’s Press Conference:
• He emphasizes disinflation
• He acknowledges a softer labor market
• He avoids talking up "tightening" or “higher for longer”
Market tells you bulls are in control if:
• SPY breaks above pre-FOMC highs
• QQQ holds above VWAP + 21EMA on 1-min/3-min
• NQ locks into trend mode (higher highs + shallow pullbacks)
Bullish Trades:
• SPY/QQQ 0DTE calls (small size, fast scaling)
• NQ/ES futures long
• NVDA/TSLA/META long scalps
• Short VIXY/UVXY pops
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B. Bearish Market Reaction (Risk-Off)
Expect a flush lower if:
In the Statement:
• “Inflation remains elevated”
• Fewer cuts expected this year
• No directional confidence from the Fed
In Powell's Press Conference:
• He points to sticky inflation components
• He leans back toward caution
• He signals “higher for longer” implicitly
Market bear control signals:
• SPY loses VWAP and cannot reclaim
• QQQ loses pre-FOMC low
• NQ puts in lower highs on every rebound
Bearish Trades:
• SPY/QQQ 0DTE puts
• ES/NQ futures short
• Short high-beta names: TSLA, NVDA, AMD
• Long VIXY/UVXY
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5. Actual Trading Strategy Template (Scalping Options or Futures)
Phase 1 — 2:00 p.m. ET (11:00 a.m. PT)
Do not trade the first 15–30 seconds.
Algorithmic whipsaws are extreme:
• +1% up in seconds → then -1%
• Or the opposite
Wait for:
• First impulse
• First pullback
• Confirmed higher low or lower high
Your Trigger Rule
Use a 5-min, 1-min combo:
1. Direction:
o SPY/QQQ above/below VWAP
o NQ/ES breaking structure
2. Entry:
o Enter on the pullback, not the spike
o Use 1-min 9EMA or 21EMA as pullback guides
3. Exit:
o Take partials at the impulse high/low
o Tighten stops aggressively
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Phase 2 — 2:30 p.m. ET (11:30 a.m. PT)
Powell begins.
Expect:
• A directional move
• A violent reversal
• Then the real trend
Your Strategy:
• Trade the break-and-retest of VWAP
• Trade the liquidity sweep reversal
• Fade the extremes
• Avoid chasing the first 3–5 minutes
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Phase 3 — 3:00 p.m.–Close (12:00–1:00 p.m. PT)
This is the most tradable window.
You will often see:
• Trend continuation
• Or full trend reversal
Volume is smooth, spreads tighten, and direction is cleaner.
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6. Indicators to Focus On (Professional Grade)
Only use indicators that matter on high-volatility macro days:
1. VWAP (king of FOMC days)
• Above = bullish bias
• Below = bearish bias
2. 1-Min & 3-Min EMAs (9 & 21)
• Perfect for scalping trends
• Act as dynamic support/resistance
3. Liquidity Sweeps (ICT Concepts)
Look for:
• Stop runs
• Wick hunts
• Fake breakouts
→ These precede the real direction.
4. Volume Profile / High Volume Nodes
Moves often begin or end exactly at these zones.
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7. What NOT to Do
• Don’t enter before the announcement.
• Don’t buy options 5 minutes before the event (IV crush).
• Don’t scale heavy into the first 30 seconds after 11am PT.
• Don’t hold losing scalps—cut instantly.