Daily Brief - Wednesday, 3/19/25
The market awaits FOMC, expect a calm morning and a turbulent afternoon. Caution and protecting capital will be the top priorities today.
Disclaimer
This publication and its authors are not licensed investment professionals. Nothing posted on The Shmuts blog should be construed as investment advice. Do your own research.
A Warning for this Week
A few key factors to watch for in the upcoming week—four major variables are aligning, which could drive significant volatility and dramatic price movements in NQ.
March 2025 (NQH25) Contract Expiration – Friday, March 21st
There are still 243K contracts that need to be rolled, closed, or allowed to expire by the deadline.
Rollover week historically leads to erratic price action, so much so that many futures traders avoid trading altogether due to the added risk.
March OPEX (Options Expiration) – Friday, March 21st
This week, approximately $756 billion in put options on S&P 500 stocks are set to expire.
The key takeaway is what happens behind the scenes:
Market makers (MMs) are typically the other side of the trade when options contracts are opened.
The majority of outstanding puts were bought to open (long puts) due to the recent downtrend.
Since MMs are short the put, they buy stock to hedge their position.
As these contracts are closed, exercised, or expire, MMs will unwind their hedges, meaning large-scale selling could hit the market, adding to volatility.
FOMC Meeting – Wednesday, March 19th
FOMC meetings always bring volatility, but with the other factors at play this week, we may not get the usual calm before the storm leading up to the announcement. While the market expects no rate cut, all eyes will be on the press conference for clues on future policy shifts—especially any signals on the timing of the next rate cut.
News Shock Risk
Don’t overlook the ongoing risk of unexpected news shocks—a reality traders have been navigating for the past two months. Combine this with the other market-moving events, and we could be in for an extremely volatile trading environment. Stay sharp.
Discretion is the better part of valor. I call weeks like this "survival weeks"—where the primary goal isn’t maximizing profits, but protecting capital and getting through unscathed. If you happen to make money, great—but that’s secondary.
There’s no shame in sitting on the sidelines and avoiding unnecessary risk. If you choose to trade, size down, manage stops carefully, and stay prepared for sudden price swings in either direction. Scalping is a valid approach—see money, take money.
Upcoming News
Wednesday - 3/19/25
2:00pm EST - Fed Median Rate Forecast (Expected: 4.375%)
2:00pm EST - US Interest Rate Decision (Expected: 4.5%)
2:00pm EST - FOMC Summary of Economic Projections
2:00pm EST - FOMC Rate Statement
2:30pm EST - FOMC Press Conference w/ Chair Powell
Thursday - 3/20/25
8:30am EST - US Initial Jobless Claims (Expected: 224k)
10:00am EST - US Existing Home Sales (Expected: 3.94M)
Prior Session Stats and Analysis - Tuesday, 3/18/25
Session Open: 19,898.00
Session High: 19,900.25
Session VAH: 19,762.50
Session POC: 19,706.25
Session VAL: 19,687.25
Session Low: 19,604.25
Session Close: 19,706.25
Session Settlement: 19,701.75
Session Range: 296 pts, 1184 ticks
OI Change (Prelim): +8,891 (NQ) / +13,988 (MNQ)
Est Volume: 930,036
Prior Session Analysis
Yesterday’s session was a Normal Day, characterized by a wide Initial Balance (IB). Aside from a small test below the IB at 11 AM, price remained within the IB for the rest of the session. The total range for the day was less than 300 points, typically signaling a lack of strong trading opportunities.
The best move of the day was the initial auction down from 9:30 AM to 10:00 AM. After that, price chopped sideways in a tight range, with the prior session’s value area high acting as support and VWAP serving as resistance. Range traders had some opportunities to go long off the bottom of this range, but momentum-based setups were largely absent.
This type of low-volatility price action is common ahead of major news events, with the market awaiting clarity from today’s FOMC rate statement and press conference. Expect increased volatility as traders react to the Fed’s messaging.
From a participation standpoint:
NQ added a net of +8,891 contracts on Friday.
March 2025 (NQH25) contracts decreased by -41,508 contracts.
June 2025 (NQM25) contracts increased by +50,299 contracts.
Based on CME Open Interest data, the June (NQM25) contract has officially overtaken March (NQH25), now holding over 80K more contracts. As I mentioned yesterday, at this point, you should be trading the NQM25 contract.
Volume was again high in yesterday’s session, with over 900k contracts traded.
Plan for Today - Wednesday, 3/19/25
As of this writing, overnight inventory is slightly long, trading +60 points above yesterday’s settlement. Price has met resistance twice near 19,800 and found support around 19,660, which also served as a key support level during yesterday’s NY session.
Typically, FOMC days are low-volatility leading up to the announcement, with heightened volatility arriving after 2 PM, particularly during Powell’s press conference at 2:30 PM. However, given the broader market variables at play, we could see elevated volatility earlier in the session—though that would still be somewhat unexpected.
If momentum-based moves develop, I won’t rule out taking trades, but I’ll be extremely selective with my setups. Once the press conference begins, expect sharp price swings in both directions as the market digests Powell’s comments. While no rate change is expected, any dovish or hawkish tone could trigger significant volatility.
Trade cautiously during this period—uncertainty can lead to erratic price action and sudden reversals. It’s perfectly fine to sit out today and just observe. Protecting capital should always be the top priority.
Levels I’ll be watching for today:
19,900 - area of yesterday’s session high. A break above this would indicate bullish sentiment and could lead to a significant auction up.
19,762 - area of yesterday’s value area high. Overnight inventory has been trading sideways in this area since 6am.
19,687 - area of yesterday’s value area low and also very close to yesterday’s support area.
19,604 - area of yesterday’s low. A break below this would indicate bearish sentiment and could lead to a significant auction down.