The S&Ps opened up a touch and immediately slipped into a sideways chop while we waited for the Fed.
Promptly at "Fed time," we got the FOMC statement, which contained a 25 bp rate hike as expected, and the "dot plot" indicated another hike in 2026 too.
As for the reaction, the S&Ps initially tried to move higher but then collapsed. Yields rose but primarily in the short end, which flattened the curve. The dollar also exploded to the upside. Gold and silver, which had been higher prior to the FOMC, slumped.
Warsh's presser was a complete nonevent and ended right as the last hour began.
The S&Ps plunged to a loss of over half a percent, but with about 30 minutes to go, a bounce appeared, which cut that loss to just under half a percent for the close.
The dollar was much stronger, with the DXY surging over nearly three quarters of a percent to a new high for the move.
Yields surged in the short end, with the 2yr jumping 7 bps, while the long end actually fell 1 bp in the 30yr and only rose 1 bp in the 10yr to 5.02%. Long rates may be peaking here for a bit I suspect.
BTC fell a touch but held up pretty good considering yesterday's failure of the Clarity Act.
Commodities were mostly a little lower, but not by much. Crude fell 3 percent on headlines out of Saudi that its pipeline would be partially back online in days ("We'll see about that," the Houthis said.)
Gold and silver began the day to the upside and were both higher ahead of the FOMC. However, when the FOMC statement hit, gold and silver both plunged. After undercutting the recent low for the move, both metals then rebounded to go out back above those lows of last week but still with losses of over half a percent and nearly a percent respectively.
The GDX also slumped to a new low for the move since the recent high but likewise rebounded to go out back within a nickel of that prior low but with a loss of over a percent.
As you will see below, I sold my GLD and SLV puts on the post-FOMC plunge and then reversed and bought calls on both for Friday.
When a H&S pattern doesn't break to the downside like it should, the result is typically a fairly violent rally in my experience, and both gold and silver have had every opportunity to break down from those rather obvious patterns at this point but haven't done so.
That refusal to go down suggests that the next move is likely to the upside. Granted, I could be early, and maybe both metals slip a little more tomorrow. However, they don't appear to be set up for the larger decline that I had been expecting previously.
Both metals and the GDX also have a falling wedge pattern in play now as well, which is typically bullish. We also have bullish RSI divergences on the hourly charts of gold, silver, and the GDX too.
The one caveat is that both the metals and GDX are below their 5 dma still, which means the bears still statistically remain in charge.
So, we'll see what happens, but 25 bps certainly isn't going to do much to kill the ongoing inflation that oil is generating. Perhaps the market comes to the same conclusion overnight, and the metals rip as a result? We shall see...
My gold model remained on a Tier 3 BUY for a 3rd straight session. Recall it normally takes several days of this signal in order for a rally to develop, but at this point, it has been three. Thus, the odds of a move to the upside are increasing.
Positions: Short SPY, QQQ, MDY, and IWM. Long DBA, STRC, and IBIT.
Metals: I added SLV 57 puts and GLD 390 puts for today's expir ahead of the FOMC because I was worried my SLV 55s were too far away at this point even if I was right about a post-FOMC slide. I then sold them all after the metals plunged. As the last hour began, I then reversed and bought GLD 410 and 412 calls as well as SLV 60 and 61 calls, all for Friday.
