Where is that Fed put when you need it?

BY ANDREW GIOVINAZZI

March 11, 2025

Yo Pit Crazies,

I am going live with the genesis of the Two-Way Trading style on Wednesday. It was days like Friday and Monday that I came up with the idea in the first place. We will show you how to get the market to pay for protective options like VIX calls and SPY puts. What the market loved in 2024 and to Jan 20th 2025 it does not love anymore. This is a good time to learn the strategy.

The first thing to look at is what is getting sold and what is not. The Mag 7 and Broadcom Inc (Ticker: NVDA) are getting sold. The Invesco QQQ Trust ETF (Ticker ; QQQ) was down over 4% Monday 15% from the top in December 2024. It does not help when key administration players, like POTUS and SecTres come out over the weekend and say there will be some pain short term.

That is some tough love right there but long overdue. Successive governments since 2002 have used any crisis to jack government spending and never take it back. The emergency spending from 9/11, GFC, COVID has never gone away. Year you heard that right. See below.

What traders were worried about, from time to time over the last 20 years, was how the USGOV was going to pay for this. That is a large open ended question. As of right now, the answer is the USGOV is going to put on the spending breaks. Traders have been used to the Greenspan put, Bernanke put, Yellen Put and right now the Powell put. Money flowed into the market at a moment’s notice.

Is that put ever going to materialize?

Traders and funds are going to sell the high beta stuff first

That means all the QQQ stocks trading at insane growth multiples. It has been serious too. I will say this, it happens every single market cycle. The lone exception is probably Amazon.com (Ticker: AMZN) that kept growing ever so impressively after the DotCom crash. AMZN did have a first crash at one point giving up 80% from the top. Microsoft Corp (Ticker: MSFT) dropped 60% and languished for 10 years.

The issue is now there is no end point to the bad news. Tariffs, spending cuts and new world order were all known quantities 1 month ago but now the market cares and that is all that matters. Plus it appears the Fed is stepping out as it needs to perform some tough love with Congress.

I would look at setting up a two way trade down to -20% in the QQQ or $440 QQQ . We are too close not to hit it now. The Fed Put finally expired.

To Your Trading Success,