Today's Observation: The big pie is too strong... Yesterday's market didn’t follow the plan, but the operation surprisingly hit the target by mistake?!

Alright, I won’t analyze the FOMC results from last night too much since we've seen them... In short, although two governors indeed voted against, breaking a 30-year record at the Fed... Powell was not soft at all, continuing to be hawkish all the way... Still insisting on two points: employment is solid, inflation is not decreasing... So, no rate cuts for now.

Before the next interest rate meeting in September, there are still two complete rounds of inflation and employment data. There's more observation space (for example, mainly observing whether the impact of tariffs on inflation is temporary or long-term). So right now, there are no expectations at all...

The big pie is indeed quite strong... Although Powell kept talking and the market kept dropping, after talking for a night, it surprisingly rallied... (Of course, one important reason is that last night the earnings reports from two tech giants, Microsoft and META, were very good. After being released post-market, there was a massive rally that pulled up the U.S. stock index futures, which in turn lifted the big pie. This wave of buying was really strong.)

Looking back at yesterday, it feels a bit like hitting the target by mistake... The original plan was to rally before the GDP release, drop after the release, and then rally again after the FOMC. But the actual outcome was a rally after the GDP release, a drop during the FOMC, and then a late-night rally... Although the trend followed the plan, the event reactions were completely off... The result didn’t have much impact on operations... The low long positions held yesterday already took a large part of the rally after the GDP release (the plan below 11.90 yesterday). Then it dropped, and I picked up part of it again at 11.75... But then Powell kept talking and the market kept dropping, making me anxious... It felt like it was going to drop below 11.50... (The plan yesterday was that if hawkish, it might kill 11.50 to fill the gap downward.)

So I didn’t add positions below 11.75, setting stop-loss orders below 11.50 and bottom-fishing orders below 11.40~11.20... (To fill the gap) Then I woke up and found, hey... How come I didn’t get stopped out and it automatically took profit for me... Just four words: hitting the target by mistake...

Looking at the funding aspect, although the ETF has still seen a net inflow these past two days, it’s basically just a drizzle... Less than 100 million a day... It feels like during this super macro week, everyone is being quite cautious...

Tonight at 8:30, there’s also PCE data... We need to continue to see volatility...

Alright, let’s continue to watch today...

From a technical perspective, since the new high, the peaks have been slowly declining... (12.3, 12.09, 12.03, 11.98) The short positions near 12W are getting more and more comfortable, and the liquidity above is accumulating... Meanwhile, the longs are repeatedly getting liquidated... (Whale sell-offs and Powell yesterday)

During this trading period, the average cost for short-term traders (30-day RVWAP) has gradually approached around 11.55W... So 11.50W will also be an important watershed in the future. One is the hidden massive buying during the whale sell-off, and the other is the average holding of short-term traders... So as long as it doesn’t break here, it will continue to oscillate in the short term... If it breaks and can’t recover, then it will need to fill the gap at 11.20~11.40...

From the order perspective, there are now two waves of sell orders, not too big, around 11.90 and 12... The contract sell orders are still hanging around 12.1~12.2W (the medium-term short liquidation zone). Are they hoping to hang there in advance and wait for liquidity to spike there?

Today's thought process... For high shorts, I’m still looking at the pressure levels of two orders... I just entered below 11.90, the old thought process, run away after 500-1000 points, if it breaks above 11.90, I’ll run... Below 12W, the same thought process can be applied for a wave... If it continues to spike to clear 12.1~12.2, I can enter again and hold for a while... Only run if it breaks ATH.

The low long positions can be seen around 11.80~11.78... Previous lows + breaker block + yesterday's dense chip area... Run away if it breaks 11.74... If it goes lower, then look around 11.65... (Yesterday's V gap position) This can be held a little longer; if it breaks 11.50 and can't recover, then run.

The low long positions will depend on the actual situation. If it’s a spike caused by unexpected PCE data, we might not need to hang aggressive positions for now. If the PCE data doesn’t have much impact and slowly grinds down, then being aggressive could be considered.