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Thursday, September 18th
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“The world will ask you who you are, and if you don’t know, the world will tell you.”
– Carl Jung
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Major Market Events
- Nvidia Invests $5B in Intel — The leading chipmaker will take a large stake to fund data-center and PC products, sending Intel shares sharply higher
- Fed Cuts Rates by quarter point — Policymakers lowered rates but warned there are no “risk-free” options ahead, markets watching next moves closely
- El-Erian Cautions on Fed Outlook — Economist and former CEO of PIMCO, Mohamed El-Erian welcomed the latest Fed cut but warned of messy divisions within the Fed on future policy
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🤔 My Thoughts
The Cut Isn’t the Trade — The Path Is
Follow the plan, not the guess. The path matters more than one report.
The Fed finally delivered yesterday with a quarter-point rate cut.
And they kept quantitative Tightening (QT) going. (that’s just a fancy word for “un-printing” money.)
Powell’s message was simple: meeting by meeting, the latest economic data will drive their decision-making.
That tells me one thing. A single move is not the story. The path of rates is the story.
Powell even said a quarter point by itself won’t change the economy much.
What matters is where policy goes next, and how fast it gets there.
I agree. So I’m not chasing a headline pop.
Here’s how I’m reading it:
- The labor market is cooling. Unemployment ticked up. Job gains slowed
- Inflation is mixed. PCE sits in the high twos. Core is a touch higher
- Goods prices picked up, and tariffs are part of that
Powell called those tariff effects short-lived in the base case.
He also said pass-through — how much the companies who actually pay those tariffs pass on to consumers — has been slow and small so far.
The market treated Powell’s post-announcement Q&A as neutral. At the day’s close, stocks were basically flat on the day.
That supports one simple idea: the overall path of rates matters more than one report.
So what now?
I’m waiting for the daily close, not watching every bounce or dip during the day.
If prices close back above the key moving averages — and stay there — I pay attention.
If I also see options activity lining up with that move near the close, even better.
If price pops but the options activity doesn’t back it up, I wait.
I’m also watching which parts of the market act like this rate cut buys the economy more time.
- AI-related spending still looks healthy.
- Spending by higher-income households is holding up.
- Housing is still weak. That needs better monthly payments, not just a headline rate.
When I do act, I’ll use defined risk. Simple vertical spreads with tight exits, making sure to keep size small.
I’m not trading the press conference. I’m trading evidence.
Bottom line: the cut isn’t the trade. The overall path is.
If price and options activity both confirm that path, I’ll take the trade.
If not, I’ll wait. Discipline over hero trades.
We’re back at it right now with practical market insights you can use today.
Click here to watch the on-demand replay!
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To Better Trading,
Alex Reid
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