The Fed's interest rate meeting is approaching, with SPY technical indicators showing high-level dullness. How will U.S. stocks perform this week?
Has the turning point of this week's market arrived?
How will the market perform under the dual risks of the Federal Reserve's interest rate meeting and the geopolitical conflict between Israel and Iran?
Current technical market conditions:
1. Daily technical indicators weaken, prioritize short-term defense
The S&P 500 ETF (SPY) has fallen below the 5-day and 10-day moving averages, with a death cross appearing. If it closes below the 20-day moving average this week, hedging strategies should be immediately implemented, with risk management as the top priority.
2. Weekly KD breaks above 100, consolidation at high levels is the ideal scenario
Based on historical experience with the daily J-value, after the weekly KD indicator overheats, a 1–2 week consolidation period is expected. Monitor for high-level stagnation as a reference for trading strategies.
3. Federal Reserve meeting + geopolitical tensions test market resilience
Federal Reserve policy moves and the Middle East situation are key uncertainties.
Institutions have not increased short positions but lack momentum to push the market higher. Defensive strategies and risk control are recommended.
4. U.S. stock CTA positions remain bearish, but selling momentum has weakened
Currently, E-mini S&P 500 (-0.29%), Nasdaq 100 (-0.21%), and Russell 1000 (-0.32%) CTA positions are net short, but compared to a month ago (-1.1%), short positions have significantly decreased, with CTAs gradually covering.
The 1-month and 3-month position indicators for the three major indices are above 0.75, indicating historically high levels. If prices strengthen further, CTAs may be forced to cover shorts or even turn net long.
5. Layered position management strategy recommended
If holding less than 50%: Gradually invest in strong stocks, but no single trade should exceed 20%.
If holding a high proportion: Reduce positions moderately and retain cash. If the index falls below the 20-day moving average, execute hedging or profit-taking decisively.
6. Focus stocks and industry trends
Technically weak:
TSM (TSMC), TSLA (Tesla), AAPL (Apple) show weakening technical trends—stay alert.
Beneficiary themes:
MU (Micron) benefits from the memory chip price cycle—monitor pricing and inventory changes.
Momentum stocks:
ORCL (Oracle), AVGO (Broadcom), CRWD (CrowdStrike) have leading potential and are key indicators of market strength.
📌 Summary:
The market is in a technical correction amid policy uncertainty. Avoid chasing highs, adopt a layered position strategy, and adjust based on key moving averages and volatility. Monitor sector rotations and AI industry themes for defensive opportunities.
2025 will be a volatile year, requiring digestion of the past two years' gains. Strict discipline is essential—plan position management carefully. Those with strong discipline may consider joining our community.
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