The Small Cap Swing Trader Alert Archive
Below you'll find The Small Cap Swing Trader setups stacked up and ordered chronologically.TikTok US-China Deal
TikTok US-China Deal: Beijing Confirms Algorithm Use as Trump Extends Deadline
Beijing has confirmed that TikTok’s U.S. app will continue to run on its Chinese-developed algorithm, even as Washington raises national security concerns.
President Donald Trump extended the deadline for a U.S. shutdown, saying he is working on a broader TikTok US-China deal that could reshape the platform’s future.
What Beijing said
China’s Ministry of Commerce stated that TikTok’s recommendation system—the powerful algorithm that drives its user engagement—remains under Chinese export controls.
Officials reiterated that Beijing views the algorithm as a “strategic technology asset,” allowing it to be licensed but not transferred outright.
That means U.S. users will still rely on the Chinese-developed version, raising fresh questions about data security and oversight.
Trump’s extension and promise
President Trump, who has long argued that TikTok poses a national security risk, extended his administration’s deadline for banning the app.
He signaled optimism about a potential agreement with China, describing it as a “comprehensive social media and technology deal” that could prevent disruption for TikTok’s 170 million American users.
The White House framed the extension as a window for negotiations with ByteDance and potential U.S. partners.
Market and political reaction
- Tech stocks: U.S. social media peers like Meta (META) and Snap (SNAP) dipped on the news, as a TikTok ban would have boosted their ad market share.
- China equities: Shares of ByteDance-linked firms and other Chinese internet names rallied on hopes that TikTok avoids a U.S. shutdown.
- Political risk: Lawmakers from both parties remain skeptical, with some pressing for stricter safeguards even if a TikTok US-China deal is reached.
What traders should watch
- 2-Year yield vs. tech beta: If negotiations reduce political risk, high-beta names like SNAP, META, and GOOGL could rally with growth sentiment.
- Event-driven setups: On headlines around deal progress or setbacks, scalp volatility in short-term options or ETF proxies like KWEB (China Internet ETF).
- Defensive hedge: If talks collapse, expect rotation into META/SNAP long trades as ad budgets redirect, while shorting Chinese tech ETFs intraday.
Headline risk is high — traders should anchor VWAP to the minute of policy announcements and fade extreme moves that fail to confirm with volume.
Bottom line
The TikTok US-China deal remains in flux: Beijing insists on algorithm control, while Washington seeks safeguards.
Trump’s extension gives markets temporary relief, but headline-driven volatility will dominate trading.
Social media names and China tech ETFs will offer the cleanest intraday setups as traders react to each twist in negotiations.
Fed Rate Decision and Dot Plot
Why is this meeting different?
The confirmation of Stephen Miran to the Board of Governors on the eve of the meeting has sharpened focus on potential dissents and the balance of views inside the room. Miran is expected to favor a deeper cut than consensus, reflecting the administration’s view that the Fed is “behind the curve.” Meanwhile, some regional presidents could argue for patience given sticky inflation components and a labor market that’s cooling rather than collapsing. Any cluster of dissents will underscore a widening debate about the speed and scale of easing. :contentReference[oaicite:1]{index=1}
What to watch in the Fed rate decision and dot plot
- Size of the move: Futures-implied odds lean heavily toward 25 bp. A 50 bp surprise would signal the Fed is front-loading cuts in response to deteriorating data momentum.
- The median path (“dots”): Traders will parse how many cuts the median participant pencils in for the remainder of 2025 and into 2026. A two-cut median this year, versus three, would be read as cautious easing.
- Macro forecasts: Look for revisions to unemployment and core inflation that justify easing while preserving optionality if inflation proves sticky.
- Powell’s press conference: The tone at Jackson Hole leaned modestly dovish; a similar cadence would keep additional cuts in play for October and December without pre-committing.
Politics at the door—how much gets in the room?
The Fed prides itself on independence, but the optics are tricky. A newly seated governor who also serves in the executive branch (on unpaid leave), direct public calls for “bigger” cuts, and litigation headlines around board composition all raise questions investors don’t normally ask of a central bank. The policy signal still comes from data and consensus-building, yet the communication challenge is harder: Powell must validate independence while acknowledging elevated political scrutiny.
Trading playbook: what matters after the headlines
- First move vs. second move: The initial algo burst often fades. Focus on how 2- and 10-year yields settle 30–60 minutes after the statement and during the Q&A—this is where the policy path, not just the print, gets priced.
- Curve and risk appetite: A cut paired with cautious dots can bull-steepen the curve and favor rate-sensitive sectors; a cut with an aggressive easing path may spark a broader duration grab but also revive “soft landing” equity rotation.
- Dollar reaction: If Powell keeps optionality without endorsing back-to-back cuts, the dollar’s reaction could be muted; a clear nod toward consecutive easing tilts the balance toward a softer USD.
- Volatility bands: For intraday traders, respect prior session ranges into the press conference. Expect whips if dots and rhetoric diverge (e.g., cautious dots but dovish tone).
A disciplined reading of the Fed rate decision and dot plot will also help frame sector rotation: financials react to curve shape; homebuilders to mortgage-rate beta; megacap growth to duration sensitivity; cyclicals to GDP revisions and labor commentary. Tie your setups to the policy path, not just the headline rate cut.
Key scenarios to game out
- Base case (most likely): 25 bp cut, dots imply two cuts for 2025, Powell signals data-dependence with mild bias to ease. Risk assets initially mixed, then followed yields lower; equities prefer quality growth and housing-adjacent plays.
- Dovish surprise: 50 bp or dots signaling a faster path. Duration rallies hard; cyclicals pop if growth forecasts hold; USD softer. Watch for “buy the rumor, sell the news” in high-beta tech.
- Hawkish tilt: 25 bp, but dots show only one more cut, or Powell dampens October odds. Front-end yields reprice higher; financials outperform; long-duration equities wobble.
What your team should prepare before 11:00 a.m. PT
- Levels: Mark pre-FOMC ranges on your core names; define invalidation points for reversal attempts.
- Flows: Track front-end yields (2y), belly (5y), and real yields; confirm equity reaction aligns with rates.
- Playbook: Pre-write entries/exits for each scenario to avoid chasing the first headline.
Bottom line
The cut may be “in the bag,” but the path is not. For traders, the message inside the Fed rate decision and dot plot—and how Powell contextualizes it—will shape the next leg for rates, the dollar, and sector leadership. Keep your bias flexible, your levels clear, and your risk tight as the narrative evolves through the press conference and into the next jobs and inflation prints.
Fed Rate Cut Trading Strategy
Fed Rate Cut Trading Strategy: Stocks and Sectors to Watch
The Fed is expected to cut rates by 1.5 percentage points over the next year. But not all cuts are bullish for all stocks.
How the 2-year yield reacts will dictate whether traders lean into growth, cyclicals, or defensives.
Here’s the tactical Fed rate cut trading strategy for day and swing setups.
Scenario 1: Slow growth, shallow cuts (2-year yield dips moderately)
- Winners: Growth stocks (XLK tech, XLY consumer discretionary), real estate (XLRE), select small/mid caps (IWM).
- Intraday setups:
- Watch for breakout strength in names like MSFT, AMZN, ORCL after Fed headlines. Buy above VWAP with volume confirmation.
- Fade defensives like XLU (utilities) if risk-on flows push yields slightly higher after the cut.
- Swing idea: If the 2-year yield stabilizes but doesn’t collapse, consider overweighting growth and cloud infrastructure leaders for a multi-week hold.
Scenario 2: Sharp slowdown, aggressive cuts (2-year yield collapses)
- Winners: Defensives — healthcare (XLV), utilities (XLU), consumer staples (XLP), and real estate (XLRE).
- Intraday setups:
- Buy dips in JNJ, PFE, DUK if tape stabilizes above premarket lows post-Fed.
- Short cyclicals like XLF (financials) and XLI (industrials) on failed rallies into VWAP.
- Swing idea: If growth fears dominate, rotate capital into dividend-heavy defensives with tight stops under recent swing lows.
Scenario 3: Cut-pause-cut history (short-term dip, long-term gain)
Trivariate Research data shows the S&P 500 often drops 2–3% in the first month after a renewed cut, but rallies 15% over 12 months.
Best sectors: financials, discretionary, technology. Worst near-term: real estate, comms, healthcare.
- Day trade plan: Short SPY/QQQ into initial Fed spike if tape rejects ORH, cover into exhaustion flush. Then look for reversal buys once VWAP reclaims.
- Swing idea: Build staggered long positions in XLK and XLF into weakness, with 6–12 month horizons.
Execution checklist
- Anchor VWAP to the minute of the Fed decision — bias flips around this line.
- Map 2-year yield vs. 10-year yield — steepening favors cyclicals, collapsing favors defensives.
- Size down at the initial headline. Scale only after direction is confirmed.
- Keep stop-losses tight; Fed days produce outsized whipsaws.
Bottom line
The correct Fed rate cut trading strategy depends on the 2-year yield’s reaction.
A shallow dip = growth and cyclicals. A collapse = defensives. A cut-pause-cut path = short-term pain, long-term gain.
Traders should map VWAP levels, track Treasury curve shifts, and treat Fed days as volatility events to scalp, fade, and swing into.