S&P 500 at record highs. But what happens after the Fed?

Welcome back to Hitting the Bid Weekly!

Around the Market

Momentum builds, but the Fed meeting could be the real catalyst

Well, it seems that if you keep voting “Up”, you’re going to be right each week. The S&P 500 (via SPY) climbed 1.86% to $660.91, hitting another all-time high on Monday at $661.04. Early last week, SPY hovered in the low $650s before accelerating into late-week strength. Now all eyes turn to Wednesday’s FOMC meeting, where a cut in the Fed Funds rate is essentially locked in at 25 basis points. The Fed will also release its updated Summary of Economic Projections, covering inflation, GDP, and unemployment forecasts. Markets will be parsing these numbers closely to get a read on how the Fed views recent upticks in inflation and softer labor trends.

Will Wednesday be a non-event? Will markets rally once the event risk is out of the way? Or could they slip if the Fed sounds more cautious on the labor market? I know I’m on pins and needles waiting to find out.

Other key market moves last week:

• Volatility (VIX): Mostly lower but ticked up Monday, +0.58 to 15.69

• Gold: Consolidated through the week but strong Monday, +$43 to $3,720

• Bonds: Up but momentum slowing, +0.3% to 117.84

• US dollar (DXY): Couldn’t catch a bid, -0.15 to 97.3

• Crude oil: Choppy price action but higher, +$1.15 to $63.02

• Bitcoin: Strong week, +$3,100 to $115,200

The Week Ahead

Economic Calendar

• Federal Open Market Committee (FOMC) with Summary of Economic Projections - Fed Rate Decision and Press Conference (Wed 9/17 2:00p ET)

• S&P Global US Flash PMI (Tue 9/23 9:45a ET)

• US Durable Goods Orders (Thu 9/25 8:30a ET)

• Inflation PCE Price Index & Personal Income and Outlays (Fri 9/26 8:30a ET)

• Job Openings JOLTs (Tue 9/30 10:00a ET)

Notable Earnings

• Micron MU (Tue 9/23 after close)

Not an exhaustive list — just a few I’m watching closely for potential market impact.

On My Radar

Bulk savings, $1.50 hot dogs, and a pennant pattern forming

Over the weekend, I took a stroll through one of my favorite spots: Costco (COST). Crowds and long checkout lines aside, I actually enjoy the experience. For me, there’s something oddly satisfying about saving money by buying in bulk. A friend also sent me an Acquired podcast that dives deep into Costco’s story, and it’s fascinating to see how their business model has powered such consistent success. And let’s be honest, I can’t say no to a $1.50 hot dog.

Looking at the weekly chart over the past five years, price action has been consolidating into a narrowing range, forming what looks like a pennant pattern. Typically, these are continuation setups, meaning if the pennant forms after a strong move higher, a breakout often extends the trend. Of course, false breakouts happen, so I’ll be waiting for a strong signal (think large-bodied candles with little to no upper wick) before considering a long setup. With Implied volatility rank elevated around 31, a bull put spread could be attractive here, if the breakout occurs and volatility remains elevated. It benefits from upside continuation but also sideways price action, falling volatility, and simple time decay.

What’s Top of Mind

How risk and expected value work together to guide better choices

In recent posts, I talked about the tradeoff between speed and accuracy and how to quantify risk in decision-making. Now it’s time to layer in expected value (EV). On the surface, both formulas are simple, but together they create a powerful framework.

A quick refresher on expected value from this post: 

That looks intimidating, but simplified it means you add up all the possible outcomes, multiply each by its probability, and you get the “average” payoff if you repeated the decision many times. Unlike the risk formula, EV forces you to consider both the upside and downside, not just one scenario. Positive EV is good here.

Now from this post, we have risk:

This one is straightforward. It asks you to think about not just how likely something is to happen, but how big the impact would be if it did. Missing your flight might only be a 10% chance, but if it means missing your best friend’s wedding, that consequence is huge. Suddenly, it feels like a risk worth planning around.

Here’s where it gets interesting. Risk zooms in on what could hurt you most. EV zooms out to show whether the decision creates value overall. One without the other can give you a skewed view. If you only think in terms of risk, you may talk yourself out of good opportunities because the scary outcomes loom too large. If you only think in terms of expected value, you might downplay consequences that are rare but devastating.

Used together, these formulas create a more balanced decision-making framework. Risk keeps you honest about vulnerabilities. EV reminds you of the bigger picture. Together, they help you ask the right questions: Does the upside outweigh the downside? Do I need to put guardrails in place to handle the worst case? Or is this simply not worth it?

You don’t need a spreadsheet for every life choice, but even loosely running these two lenses can make your thinking sharper. At the end of the day, it’s about making decisions that aren’t just smart “on average,” but also resilient in the face of uncertainty.

P.S. Want to see more of my trades? Subscribe to my YouTube channel.

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Hitting the Bid content is for informational and entertainment purposes only. The information contained is not, nor is it intended to be, trading or investment advice or a recommendation of any security, futures contract, digital asset or alike. I may hold a position in the trading vehicles discussed. Trading and investing contains risk. All investors should evaluate their own risk tolerance, financial situation, and investment duration before entering any trade or investment.