Could this work?

Quick post here on something to think about when looking at how you could work out playing the move in equities from an intraday perspective...

Remember, I am pretty discretionary and rarely trade intraday moves apart from when there's a volatility pick up and potential opportunity.

Take a look at the below chart of the $ES front month contract.

What are we looking at here?

Well, with the help of Adrian Alberts, who I spoke through this idea with just this morning, I reckon we're looking at the potential for a test to the upside and a push lower.

This is naturally coinciding with the Fed meeting, where they could signal a change in monetary policy for the March meeting...

But signal is the key word here.

We must ask ourselves whether they have been spooked by the market activity in the front part of this week, and whether they will draw back their hawkish tone a little...

Or just go full steam ahead, like I expect them to.

What this would give rise to is more turbulence.

What truly matters is the speed of tightening/the hike cycle.

Here's a brilliant chart documenting this.

The key is the tone used by the Fed tomorrow though.

I've highlighted the level above at 4422/25 since I reckon it'll play a key pivot.

Hawkish = resistance.

More dovish = support and we head higher.

See, I say higher since there's a common pattern that could come off here too...

Tim likes to call it the 'over-under'...

The market trades lower, forms a base, trades back above the base formation and then tests the range high of said base marginally before ticking higher.

It happened yesterday.

Bear in mind I am of the opinion that this WON'T happen, but good to just display all possibilities that are floating around in my head.

I am watching at the same time to see whether this could also occur and we target back towards 4500ish.

Crazier things have happened.

I am still leaning bearish though (unfortunately, and I absolutely loathe it).

The Fed has to retain some credibility here, and with inflation having been on their minds for the last year or so, the abandonment of 'transitory' (wrongly in my view) and the need to push away from the zero lower bound of 0% interest rates, they will want a lift off.

It is a given they will raise rates...

But how quickly, and by how much is the question, and this is all we have to pay attention to tomorrow and in March.