The FOMC Reversal and the Hyperscaler Catch-Up Trade
The market has produced its first credible reversal since my NASDAQ stop-out. Confirmation now depends on Nikkei, the S&P 500 and big-tech earnings, while Amazon offers the best Long Opportunity
Executive Summary
Just in case you have been living under a rock for the past 2 weeks, Global financial markets have been under significant turmoil as a result of Asian Indices taking the Plunge.
Korean Kospi Index suffered it’s largest collapse in history, plunging -40% this month, currently undergoing a sharp rebound on the day.
US Tech Sector got dragged down to the woodshed as a result of Memory Stocks (Ticker: DRAM) and Chip Sector (Ticker : SMH) getting blown out of the water
NASDAQ had been in a free-fall stage as a result of concentration risk from DRAM and SMH companies in the Index. We had been mostly out of the asset class ever since our long position was stopped. I personally wanted to wait, observe the market structure and let the market turn around before taking another long opportunity. This is where timing is everything, this week we had a cluster chaos with FOMC meeting and Big tech companies (MSFT, AAPL, AMZN, META) reporting their earnings. This timing cluster around the FOMC meeting has now produced the first reversal structure I have witnessed which is looking to cause a VIOLENT SHORT SQUEEZE
Immediate setup: When the market drops hard during an FOMC event, the final five minutes of the trading day can offer an aggressive counter trend long entry, with the daily open and London open providing the next two opportunities. Given that FOMC events have a reputation of reversing their moves the next day, this technique generally renders a safe bet on capturing the reversal before it happens
Higher-timeframe confirmation: Nikkei needs to close back above its inside-weekly lows (64,127) and confirm that the breakdown failed. The S&P 500 has already taken the downside liquidity on its inside three-week candle structure and printed a daily SFP. This Daily SFP is now causing a VIOLENT SHORT SQUEEZE rally to pursue. A daily close back above roughly 7,400 would confirm the weekly SFP and the multi-week failure pattern would be trigger a broader risk-on rally trigger.
Preferred expression: My preferred way to express long exposure to ride this short squeeze rally is through AMAZON LONGS. I am opening a starter position with 5% portfolio risk in the March 19, 2027 $300 calls. If earnings produce a 5% or 10% drop, I am prepared to add another 5% risk. I closed my Apple long after it produced roughly three times the return on the original position, and I am recycling that capital into Amazon because Apple’s quarterly move has already expanded while Amazon’s has not.
Active exposure: Google remains an active long position that I expect to hold all the way through to December. I am also holding the second half of my BTC spot position. BTC is in a bottoming process, and I remain bullish, but the expansion has not started and I do not know exactly when it will. Except for the fact that I want to keep full exposure behind BTCUSD between 65k-70k levels.
The thesis still needs confirmation. Apple and Amazon earnings must not collapse the indices, Nikkei must close the inside-weekly failure and produce follow-through, and the S&P 500 must hold the reclaimed multi-week lows. If Amazon knocks it out of the park, we will likely be facing a rip roaring rally to finish the month and the week on a high note in Global Indices.
Market-wide invalidation: The current FOMC daily low is the market-wide invalidation I am using.
The FOMC Reversal Has Reopened the Long Side
NASDAQ had been in a free-fall stage, and I had been mostly out of the asset class ever since my long position was stopped. The low that was taken out was my stop loss. Once it gave way, I was out of the long position and waiting for the market to turn around before I considered another opportunity.
My thinking was that a significant number of stops would be triggered after that low gave out. The market moved into full free-fall mode, but it was also entering a daily support zone where I expected it to defend itself. That defense arrived during the FOMC meeting.
Why the Last Five Minutes Matter
This is what the market looked like going into the FOMC meeting: it had already reached the daily support zone we mapped out, and the hourly price action was dropping into the New York session. Rates were left unchanged. The market had talked itself into expecting a hike, but I did not believe that premise made sense given the political alignment and pressure around keeping rates lower.
Figure 1: Initial bullish reaction → Bearish spike down in final hour → Bottomed in the final 5 minutes of Daily Candle Close
The unchanged decision produced the initial reaction, but that is not generally how an FOMC reversal completes. If the market is going to turn around the next day, I actually want to see a massive drop during the event. I want the fear to come into the market because that is when everybody and their emotions are screaming to go short.
The reversal sequence creates three distinct opportunities:
