Hey trader,
The Fed just walked into a trap it cannot escape.
Naturally, everyone expects markets to crater.
But what if they’re all wrong? Allow me to elaborate.
Surging oil prices have slammed the door on rate cuts while the labor market crumbles underneath.
Crude oil closed last Friday at $67.29.
Five days later, it pushed toward $95. That is a bigger move in a shorter window than the entire Ukrainian conflict produced.
In the same week, the economy shed over 90,000 jobs.
Normally, that kind of weakness hands the Fed a green light to cut. Not this time. You cannot ease monetary policy with energy prices spiraling out of control.
Most traders see chaos.
I see the setup forming for the best NASDAQ buying opportunity of 2026.
Why the Fed Cannot Act
For the past year, I have said the same thing. Tariffs are not inflationary.
Oil prices surging is inflationary. That is exactly what we got this week.
Crude closed last Friday at $67.29. Five trading days later, it pushed toward $95 and tested its highest level since 2023.
This move exceeded the entire price swing during the Ukrainian conflict. It happened in less than a week.
A weak jobs report would normally open the door for rate cuts. Without the oil spike, I would be telling you the Fed is getting ready to ease.
They cannot ease into a crude oil surge. Cutting rates here would pour gasoline on an already out-of-control fire.
Fed fund futures confirm this. The next realistic window for a rate cut has pushed out to July.
By year end, rates might drop half a percent at most. The Fed missed its window, and now the real economy pays the price.
Gas prices take $20 to $100 per week out of the average American's pocket. That money used to go to restaurants, retail, and discretionary spending.
Next week's inflation report will not reflect any of this. That data covers conditions from a month ago.
The oil spike hits the April print. And the odds of crude giving back these gains over the next month are extremely low.
The NASDAQ Is Telling a Different Story
Here is where things get interesting. The NASDAQ has not made a new low in a month.
It bottomed on February 6 and has held firm ever since.
The Dow broke to new lows this week. The Russell followed.
The S&P 500 cracked support. The NASDAQ refused to join them.
That kind of leadership shift carries weight. The NASDAQ topped out four months before the other indices, and now it appears to be bottoming first.
Historically, that is one of the classic signals you see near market lows. The Mag 10 names confirm it:
- Microsoft closed at its highest weekly level since early February
- Broadcom rallied to the highs of the week
- Palantir surged 3% on a day when most stocks got hammered
- NVIDIA finished closer to its weekly highs than its lows
Corporate insiders in the tech sector are buying at the fastest pace in five years. Short interest in technology sits at its highest level since 2021.
Every time this divergence has appeared, the market punished the bears.
I put 80 to 85% odds that the NASDAQ has already bottomed. My cyclical model pointed to this exact window for the low, and the signals this week tilted bullish even as sentiment grew darker.
How I Am Positioned
I am sitting at roughly 50% cash with selective long exposure right now.
Over in the Trinity Trade portfolio, I hold energy names like Magnolia and EQT that have benefited from the crude surge. Several Mag 10 longs are showing relative strength even on heavy down days.
Cash is a position. There is nothing wrong with staying heavy in cash during a tape like this.
The key is having capital ready when the turn arrives. The time to worry about downside was over a month ago.
A new Wave Window is forming right now in the NASDAQ. The last one closed at the beginning of February.
The biggest acceleration windows in this cycle have emerged from exactly this kind of fear and volatility. I walked through the entire framework in a live presentation this week.
If you want to see how the WaveBreak indicator identifies these windows in real time, watch the replay and see if a Charter seat is still available.
Being positioned before the next window opens makes all the difference.
Positions matter more than opinions. I have mine on.
Do you have yours?
Gianni Di Poce
THEOTrade