Hello traders,
The futures market was playing a dangerous game this week, and every tick comes down to one question: how far will Powell go on September 17?
The setup looks bullish on the surface, but the cracks in the labor market tell a more complicated story.
Weekly jobless claims jumped by 27,000 to 263,000, the highest since 2021.
At the same time, Thursday’s CPI data showed monthly prices up 0.4 percent, slightly hotter than forecast, with annual inflation steady at 2.9 percent.
Traders shrugged it off, pushing odds of a quarter-point cut well above 80 percent and even whispering about a half-point move. Hesitation is the costliest tax in trading. I learned it watching ES rip 15 points without me. Preparation kills doubt, and acting on probability is the only way forward. Blink once, and the market is gone.
This is classic late-cycle behavior: weak jobs data fuels dovish expectations, and equities squeeze higher on the promise of easier money.
Earnings are adding fuel to the fire.
Adobe impressed with strong Q3 results, and Super Micro Computer extended its AI-driven surge as Nvidia’s Blackwell Ultra systems ship faster than expected.
When semiconductors and software both print strength, futures often ride the wave, especially with AI still the dominant growth narrative.
Some of the best tells don’t happen at the open. They happen after hours. Futures whisper the real story when most traders log off. Miss that, and you miss half the game.
The tape shows clear bullish control, yet compressed ranges ahead of a Fed meeting are notorious for trapping traders on both sides.
For professionals, the playbook doesn’t change.
Position small, trade levels, and let catalysts dictate direction.
The Fed is driving this market, not technical perfection. That means risk control is more important than conviction.
Rate cut optimism is the theme. But optimism is fragile. All it takes is one inflation surprise, one hawkish leak, or one strong jobs report to flip positioning on its head.
For futures traders, the edge is not predicting the outcome but reacting faster than the crowd when the headline hits.
This is rate cut roulette. Play it with respect for the risk, and it can be one of the most rewarding trades of the year.
See you in the next one.
Imre Gams
Editor, The Trading Room
