Invaluable FedWatch Tool + Futures Trading Levels for July 20th 2022
Posted By:- Ilan Levy-Mayer Vice President, Cannon Trading Futures Blog
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Invaluable FedWatch Tool
By John Thorpe, Senior Broker
I have highlighted this tool before. the totally neat feature of this tool is it is based in the Fed Funds futures contract price movements. Because it is a reflection of market sentiment, this makes it relatively easy to see and sense the actual price discounting that is going on in the equity and bond markets and what represents “Fair Market Value” as this tool changes on a day to day basis. Imagine a zero news day. This tool would not provide any percentage changes, the FF Futures wouldn’t have moved much and the only “wiggle” in the stock indices would not be news driven and of only a technical nature. Now Imagine a day with a lot of information, as that information streams into the consciousness of traders “discounting of future prices” moves the market. As the importance of interest rate decisions have been providing market direction recently, I recommend every traded keep this link saved to your browser favorites as we approach the next and subsequent Fed Meetings . ( you can look at what the market expects for Futures Meetings as well using this tool) Spend some time with this tool https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
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