Traders,

Let’s skip the fake pleasantries. Happy holidays, blah blah—now let’s get to the point.

The Fed decided to drop a little coal in the stocking, and Twitter is collectively losing its mind over a few red days. I should be on my fifth glass of eggnog by now, but clearly, some of you need a reality check. Here’s the breakdown.

Was There News?

In order flow land, news is background noise. Sure, every wannabe head of macro loves connecting price moves to headlines — “Good news is actually bearish!”, “It was already priced in!” — but guess what? The market doesn’t care about your narrative.

Price only moves because of executed orders. That’s it. You can feel the sentiment shift in real-time by watching the tape, no interpretation needed. Headlines don’t matter if the market isn’t reacting to them.

That doesn’t mean we bury our heads in the sand to the fact that the market can respond strongly to Jerome Powell’s lips. These moments create volatility, and volatility moves markets. But instead of cosplaying head of macro, we let the order flow do the talking. That’s the edge.

How Did Our Plan Do?

Before I left for vacation, I dropped a swing trading playbook in the newsletter. If you missed it, catch up here.

Here’s the short version:

1. 6040: Bullish retests.

2. 6007: Key low volume area to monitor.

3. 5990-5985: Break here, and selling accelerates.

How’d it play out?

First, 6040 held beautifully. Hours after the plan went live, the market dipped into the level, rallied, and printed an easy 70-point move. If you missed that, I can’t help you.

Then came the sell-off. As predicted, the market sliced through 6007 and 5985, triggering step 3 of the plan. With long inventory offside, selling pressure ramped up. Retests of 5990-5985 became clean “sell the rip” trades.

It gets better. The post-FOMC high? 6006.25—three ticks off a level I gave you three weeks ago. That’s a 150-point trade if you were paying attention.

Lastly, when PCE numbers hit and SPX vol started rolling off into OpEx due to the vanna & charm decays (if you want to hear more about this from our quant team - let me know!), the market rallied. If you missed it, don’t blame me. The playbook was clear: 5990-5985 flipped back to support and set up another textbook buying opportunity.

Three simple levels. Weeks of guidance. No macro nonsense required.

Still don’t have time to trade?

What’s Next?

As much as I’d love to ride the Santa Rally narrative, seasonality is just one piece of the puzzle. Here’s what I see:

1. Volume is dead. With institutions on break, this week is noise. My edge in order flow diminishes without active participants.

2. Post-New Year fireworks. January brings renewed volume and a fresh quarter. The market’s broken out of its multi-week pattern, but nobody — bulls or bears — has seized control. Uncertainty is high, which means opportunity is too.

Here’s my framework:

• No biases. TWT members already know: Apply the “Read and React” framework.

• Don’t blindly buy dips or short rallies. Take the path of least resistance.

• Use areas, not hyper-specific levels, post-rollover until we have more MGI.

And lastly, here’s my plan:

• Before this past quarter’s big rally, the market formed a balance zone with a high of around 5805-5830. If bears catch momentum, I’ll be watching this area carefully for a potential bounce.

• If the above region doesn’t hold, I’ll be looking to 5690-5725. And if 2025 gets extra spicy, all eyes on 5550-5575 for a possible “generational low” buying opportunity.

• If bulls hold the 5985-5990 area, I’ll be targeting 6085-6090, 6120, and 6148.

With volatility elevated, you can bet I’ll be sizing down and widening my stops. That’s just risk management 101.

Want More Levels?

Want to stop guessing and start trading with confidence? Go premium. Here’s what you’ll get:

Can’t Wait?

Join the free Discord. You’ll get Adam’s Chartbook, our risk management guide, and live market insights. Sometimes, I even share bot trades when I’m in the mood.

Questions? Complaints? Memes? Hit reply. I read every email (and reply to almost all of them too) because, apparently, I hate myself.

Catch you next week,
Jay

P.S. Stop blaming Powell for your bad trades. The market moves because of orders, not headlines. Learn to read the tape or stay on the sidelines.