The large pancake has fluctuated less than 400 points in the last 5 hours, a calm before the storm!
From the current market expectations, there is over a 90% chance that the Federal Reserve will not lower interest rates tonight. This expectation has been widely discussed and digested in the market, however, the next direction of the market largely depends on the speech strategy of Federal Reserve Chairman Powell. In my personal view, Powell is more likely to lean towards hawkish statements this time. Hawkish remarks usually imply a more optimistic outlook on the economy, potentially suggesting a tendency for future interest rate hikes, or at least a determination to maintain the current interest rate levels.
In terms of long and short positions, the upward short liquidation has reached 98,500, involving an amount of 420 million; while the downward long positions are numerous, with 570 million able to be liquidated at 95,500. Such a large-scale long and short liquidation shows that there is a huge divergence among market participants. If Powell makes hawkish statements, it may trigger further volatility in the market. On one hand, shorts may be encouraged to increase their short selling efforts, pushing prices further down; on the other hand, longs may also hold their ground and use the market adjustment to increase their positions. The final direction of the market largely depends on the power comparison between both sides under these circumstances and the changes in market sentiment.
As for whether to choose to short, it is necessary to closely monitor the market's immediate reaction to Powell's speech. If the market reacts strongly to hawkish statements, showing a clear downward trend, and various technical indicators and market signals support shorting operations, then shorting may be a feasible strategy. However, if the market reacts lukewarmly, or if the longs quickly organize a counterattack, then shorting may face significant risks. Before making a decision, investors also need to comprehensively consider their own risk tolerance, investment goals, and the overall market environment.
