FOMC trading: The top has hardened while the bottom hasn't, hands are dovish, but the mouth isn't. (A bit of brain work).

Before discussing this trade, let me help my friends with poor memory recall.

Last time: Didn't everyone say that when the US government reopened and the TGA account was unblocked, it would bring liquidity? Wasn't the result a big drop?

This time: Didn't everyone say that interest rates have been cut, and the immediate action is to purchase short-term bonds, starting to expand the balance sheet on Friday? Wasn't the result a big drop?

So why is it that with all the favorable conditions and improvements in liquidity, the result is a big drop?

OK, back to my forecast article from 12.7 (U.S. rate cuts, rising sun, shadow chairman, Russia-Ukraine peace, early seedlings barking,U.S. rate cuts, rising sun, shadow chairman, Russia-Ukraine peace, early seedlings barking:

Rate cuts are a means, not an end!

The purpose is to prepare for the return of funds; the Federal Reserve will certainly start monetary policy with a stance of saving the market.

So what is being saved? How to save?

Wasn't there a rate cut? Why is the yield on the 10-year U.S. Treasury still above 4.16?

From a long-term perspective, it is the large deficit of the United States, and the market's concerns about it still exist.

From a short-term perspective, AI's major infrastructure and large investments are accompanied by the debt incurred by tech companies, which will absorb the purchasing power of U.S. Treasuries.

Therefore, rate cuts smooth out dovish rhetoric, and expanding the balance sheet prepares liquidity for the market.

Expanding the balance sheet is not about throwing money into the market to replenish reserves. (Do you remember the hand-drawn reserve diagram?)



These liquidity measures will take some time to arrive; the AI reservoir story looks promising.

In summary: it looks prosperous, but it is also prosperity.

In conclusion: overall, the focus is on high shorts, with a forecast made on the 8th.

Returning to specific operations:



Yesterday afternoon $BTC I entered my first position at 92600, and what I'm worried about is that a simple interest rate cut + hawkish conclusion could lead the market to sell the news directly, leaving no room for a rise.

The losses I took midway did not lead to an increase in positions. My timing for adding positions is based on two criteria:

The market expects two interest rate cuts in 2026, which has now changed to one. (Negative news)

The benefits of expanding the balance sheet correspond to clear targeted reserve requirements, but the emotional aspect cannot be controlled. (Added a bit here)

When answering questions from reporters, when a reporter asked whether there would be further interest rate cuts, Powell did not close the door to rate cuts. (Point of divergence)

There is a significant division within the Federal Reserve, which is unprecedented for the Fed, with a new chairman to be nominated next month.

Today, Powell's response was almost perfect. At this time, it is necessary to take a step back to observe whether the purpose of the interest rate cuts has been achieved; staying put is the best choice, which also echoes the dot plot.

Even though the long-term nature of the dot plot is not obvious here, because later it's not solely up to him, it will set expectations for a pause in January. Therefore, I added positions again and also opened a high multiple.$ETH Take the short line, as shown in the picture.



Being a blogger is quite difficult. When you trade with a clear hand, what awaits you are your group friends who want to enter from behind, and the group friends are all shorting at 94000.

Currently, there are quite a few market conditions for the door painting, so I am very cautious with my positions and haven't taken on a large amount.

Trading is too difficult.