Trading Plan – Monday 25th July 2022: Fed expected to hike rates by 75 basis-points

Mark NugentDaily Alert, July 2022

Trading Plan – Monday 25th July 2022: Fed expected to hike rates by 75 basis-points

Good morning.

Holiday – I will be on holiday from tomorrow until Monday 15th August, when normal service will resume. I will send intermittent text-based commentary during this period.

Last week was dominated by the European Central Bank raising interest rates by 50 basis-points against an expected hike of only 25 basis-points. In addition, they released their snappily named new tool, the Transmission Protection Instrument (TPI), designed to suppress runaway bond yields at the periphery of the Euro Zone. They’re talking about Italy. So, if required, they will buy Italian bonds, driving the price up and the yield down, to keep Italy in the EU. So much for market forces.

I placed three trades last week, brief videos of which are in the members area. I went long on WTI and got out at breakeven. I traded the S&P500 and the Japan225, both long, at the same time when risk sentiment was positive. I split my usual 2 percent risk equally between the two trades. The former closed at breakeven, the latter made almost 1 percent.

This week is focused on Wednesday’s Fed. There is an expectation of a 75 basis-point hike, but with a 20 percent chance of a 100 basis-point increase. As always, the accompanying statement and press conference will be watched closely by all.

VIP Club members can see today’s video, all brief trading videos, the Monthly and YTD Performance videos, the Trading Video Course and download the MTM Indicators software HERE