The catalyst that just hit the market gave me a PERFECT opportunity for sizable trading gains.
Use these news catalysts to your advantage.
I’ve been in the market for decades. That’s how I trade catalyst reactions like this…
I know how the market will react because I’ve seen it happen before.
And even if I’m wrong, my trade patterns keep my account protected so that I can bounce back on the next play.
Follow my lead, here’s how I trade market news…
Interest-Rate Catalyst
On September 16, the Fed decided to raise interest rates as a result of persistent inflation from the Iran war.
Usually, a rate hike is bad for business and a bearish catalyst for the market. It contracts the economy to control inflation.
But… When the market is prepared for a rate hike, and it comes to pass, everyone who would have sold into the bearish catalyst already did, and the lack of sellers creates a surplus of buyers. That turns it into a bullish catalyst.
On Wednesday, September 16, before the interest-rate announcement went public, the market was more than 90% certain there was a hike coming.
And I was watching one of my favorite bellwethers for a setup…
My Trade on IWM
After the Fed announced its rate decision at 2 P.M. ET, the iShares Russell 2000 ETF (NYSE: IWM) cratered intraday.
That goes against our theory of a bull rally from a baked-in bearish catalyst…
Or does it?
The initial move came from traders who didn’t understand the true effect of a bearish catalyst that’s already been priced in.
I waited for the catalyst to drop to ensure I had a good entry based on the early price action. I bought call contracts that afternoon during the selloff.
Here’s the alert I sent to traders on September 16 at 3:11 P.M. ET:
“BUY IWM 9/18/26 283 CALLS”
“FED day move often reverses. IWM is the most oversold of all indices target by Friday on a rebound would be 290”
The IWM rallied substantially on Thursday. It didn’t quite hit $290, but I’ve still got time today to realize my goals. And anyone who took some off into that rally already had a decent gain.
Sometimes a bearish catalyst is not all that it seems.
The same goes for bullish catalysts…
Take note of the market’s prediction for upcoming catalysts. That’s the missing piece of the puzzle that every trader needs to understand.
Stay Street Smart,
Jeff Zananiri
