Buzz around a possible September Fed rate cut is adding fuel to this year’s rally.
The S&P and Nasdaq keep pressing into new highs, while the Dow is still butting up against resistance—trying to break through.
But next week’s jobs data could be the real wildcard. Traders will be watching every number for clues about what the Fed might do come mid-September.
And then there’s NVIDIA Corporation (NVDA). The company crushed earnings last week… but after-hours? Crickets. The stock barely moved and traded flat the next day.
So that leaves us with the big question: will tech power higher—or just spin its wheels until the Fed shows its hand?
That’s exactly where one question in my mailbag this week takes us…
Q: Tom, if the Fed goes through with the rate cut everyone’s expecting, will that drive the markets higher?
That’s the million-dollar question, isn’t it? And it’s the first of two that I want to tackle this week.
I can’t predict with certainty. But I can anticipate possible outcomes and build trades around them.
Here’s one possibility: since so many traders already expect a cut, we could see a “sell the news” reaction. The market may dip, even if the Fed delivers. The real question is—how deep would that pullback be?
A 10% retracement would officially qualify as a correction. But it could be less severe, depending on how price levels hold up. Old resistance often turns into new support—and I’ll be watching to see if that happens.
Another scenario: cash sitting in money market accounts could flow back into stocks. If the market pulls back, buyers may rush in to scoop up bargains. And if no pullback comes at all? FOMO (fear of missing out) could push the market even higher.
Either way, here’s my approach:
- I’m trading now.
- I’ll be trading when they announce.
- I’ll be trading after.
The Fed’s decision won’t determine whether I trade—it only influences how I trade. The direction of price action after the announcement will guide whether I lean bullish or bearish.
Q: Tom, what’s the most important data you use when deciding on an options trade?
Great question—and my answer might surprise you.
While many traders lean heavily on fundamentals, I’ve always put technical analysis first. And for over a decade, one of my go-to tools has been my proprietary Money Calendar scanner.
Here’s why…
Money Calendar looks back over the last 10 to 20 years of price data and identifies recurring patterns—moves that have repeated 9 or 10 times out of the last 10 years. That’s a 90% to 100% track record.
It also gives me:
- The average price move for that pattern
- A projected price target based on that average
- And—most importantly—the expected end date of the move
That last one is critical for options traders. Knowing when the move is most likely to end helps me choose the right expiration date.
But there’s one extra feature I rely on the most: the Power Meter.
The Power Meter shows whether the average move over the last few years is stronger than the 10-year average. If it’s positive—and the regression trend line is sloping up, I know I’m looking at recent strength that confirms the longer-term pattern.
It measures the strength of the move, not whether it’s bullish or bearish. Green bars don’t always mean “up”—they mean “profitable.” A stock that consistently drops during the same window each year can be just as tradable as one that consistently rises.
Bottom line: I want to see a positive Power Meter and a strong track record before I ever consider a trade. That’s what gives me the confidence to pull the trigger.
In fact, the Money Calendar has already shown me:
- Which stocks and ETFs tend to fall in September…
- Which rare bullish names hold up year after year…
- PLUS how to trade them.
And on Monday, I’m revealing my next recommendation, with detailed instructions on when to get in, get out, and the gains we’re targeting.
Click here to learn how to get it – before time’s up.
Have a great Labor Day weekend!
To your success,
Tom Gentile
America’s Pattern Trader
