💥 Surviving a “Red-Calendar” Storm

August 01, 2025

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Hello, my Friends!

📉 The Fed’s mid-week statement delivered its usual volatility burst - rates on pause, tone still stubbornly hawkish - while political drama over renovation spending simmered in the background.

📊 After a sharp spike, Nasdaq completely reversed its win in the following session, highlighting just how uncertain these high impact events can be in the short-term.

🌍 Broader risk appetite, however, continued into Friday’s close: global equity benchmarks finished the week lower amid heightened geopolitical tension sparked by Presidential comments on an escalating conflict of a submarine deployment near Russia.

Nasdaq100

Headlines That Shaped the Tape

  • Powell: “Expect more tariff effects in upcoming inflation prints.”

    • “Our next moves will likely edge toward neutral.”

  • Futures traders dial back odds of an October rate cut—now < 100 bp priced.

  • Microsoft +8.2 % intraday, vaulting past a $4 T market cap.

  • Fed’s Hammack: “Jobs report disappointed.” (Bloomberg TV)

Should intraday traders fixate on tariffs or the timing of the next rate cut?

Those macro themes unfold over quarters, not minutes. The real story this week was the FOMC whipsaw: an initial upside surge on the policy release, completely reversed the very next session.

This is the perfect case study in why rigid intraday bias can be fatal during a “seek-and-destroy” Fed day. Treat each headline as a data point - not a destination.

Lessons from the Trenches

When the calendar flashes red at 2 p.m. ET, the market morphs into a Seek-and-Destroy arena. Trend-followers, reversal hunters - nobody is spared if they cling to a rigid bias.

Here’s the list if chaos:

  1. Milliseconds vs. Mouse Clicks

    • HFT armies ingest the Fed statement in micro-seconds (a Jan-2025 study logged near-zero latency) while humans are still reading the headline.

  2. Order-Book Vacuum

    • Liquidity pulls out seconds before the drop; spreads balloon, then slam shut as algos chase the first spike. S&P 500 returns during FOMC windows run 5× the normal daily move.

  3. Human Over-Reaction

    • Retail scalpers pile into the first candle, only to watch obvious stop losses run down and inventory rebalancing.

The 3-Phase Intraday Blueprint

Phase

Clock (ET)

Algo Behavior

Your Edge

1. Flat & Map

-10 min → -1 min

Liquidity dries up; resting orders queue

Mark two-sided “decision zones” (≈ 0.3 × daily ATR). Flatten or cut size to 50 %.

2. Release Chaos

0 → 120 sec

Micro-second reactions; spreads 3-5 ×

Observe a strict 2-minute no-click rule or keep bracket orders wide beyond obvious stops.

3. Confirmation Leg

2 → 15 min

Algos fade overshoots, rebalance

Engage only if price retests a pre-mapped zone and spreads normalize (< 1.5 × pre-event). Trade half size; trail with volatility bands, not fixed ticks.

 Historical Fun Fact

The modern “FOMC volatility window” started Feb 4 1994 when Alan Greenspan released the first ever same-day policy statement. Before that, markets had to infer moves from Fed open-market operations weeks later.

A second transparency leap came on Apr 27 2011, when Ben Bernanke held the Fed’s first post-meeting press conference - putting cameras (and even faster algos) on every word.

Knowing this lineage reminds us: the faster the Fed talks, the faster machines trade - so humans must adapt their process, not their reaction time. Stay disciplined, and let the algos do the early sprint while you line up the higher-probability follow-through.

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Until next time,
Steve B
Founder, The Daily Impulse

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