Fed Decision Plus Tech Earnings

META and MSFT on tap after the close

The FOMC decision tomorrow will be a nothing burger, rates will remain unchanged and the FOMC will continue to tow the line on higher for longer. We have neither a resurgence in inflation nor a massive increase in unemployment, so as long time readers know, as long as Non Farm Payroll remain robust, the FOMC will not cut rates. Well at least they shouldn’t. Those in risk assets that think lower rates will benefit them, are sorely mistaken. The next time the FOMC cuts rates, will bring risk asset sellers in and so maybe its a good thing they keep things status quo.

As far as tomorrow after the close we have META and MSFT. Let’s see how these shake out and lets see what the options straddles are priced at. For META, the $700 strike straddle is priced at $44 which indicates a move of 6.3%. When we look at the options there is big open interest on the $700 put. This might suggest a contrarian move higher. The 700/720 call spread is priced at $8.25, so risk reward of 1.4x not great but it is what it is, many will say this one isn’t worth playing. $653 area on the downside is our pivot, so bulls are still in control:

As far as MSFT the at the money straddle is priced for a 4% move, so this one is a bit more tame. As far as the chart its been straight up since April +49%!

We suspect the QQQs will either break out to a new range this week, or maybe the top will start to form on a solid move back toward 554:

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