X discussionSPY flushed toward 750 after the Fed's 25 bp hike and Kevin Warsh's hawkish press conference. Whale put buyers printed millions into the selloff, and traders now fight over whether the flush starts a deeper correction or sets up another V-bounce into Friday opex.
BullThe flush into 750 is the buy, not the start of a lasting breakdown. Two months ago SPY crashed to 730 then V-shaped back to 780, and Tom Lee is calling for a big rally right after the decision.
BearWarsh's hawkish message broke the tape and marks the start of a deeper correction. Whales loaded $11.3M of far OTM SPY puts ahead of FOMC, then the market dumped the moment he spoke and those puts printed millions.
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Bull evidence
@itsmichaelluuSPY just crashed from 780 to 750, mirroring the 730-to-780 V-bounce setup from two months ago
@TheSonOfWalkleyTom Lee expects a big SPY rally starting the day after the Fed decision
Bear evidence
@CheddarFlowSomeone loaded $11.3M far OTM SPY puts and $7.6M OTM QQQ puts ahead of FOMC
@CheddarFlowWarsh spoke, SPY dumped, and the pre-FOMC whale puts are now up millions
@CheddarFlowA $1.2M 0DTE SPY put whale almost tripled the position within two hours of FOMC
@pdicarlotraderThe Fed hiked then delivered a hawkish message, and the hard selloff raises the risk of a deeper correction