Fed Holds Steady, Eyes Future Cuts
At Wednesday’s meeting, the Federal Reserve left the federal-funds rate at 4.25–4.50%, reiterating two quarter-point cuts by year-end but cautioning that tariff-driven inflation remains a threat. Growth forecasts for 2025 were trimmed to 1.4%, unemployment is penciled in around 4.5%, and inflation is expected to finish near 3%, well above the 2% target. For us traders, that means interest-rate-sensitive names may stay choppy until clearer signals arrive on the Fed’s next move.
Seasonality: A Slow Start, Then the Sweet Spot
Juneteenth became a market holiday only in 2021, so we’ve got just four genuine “first trading days after” to lean on. The first three days after the holiday start slowly, but the last four years have shown solid gains in the 10 days after the holiday.
The Fourth of July Holiday is just about 10-15 days after Juneteenth, so the slow drift higher on lighter volume may have somethingng to do with it, but the data shows that the market has a history of going from Juneteenth to the Fourth of July, with a bullish bias in the week to two weeks after each holiday.
With the VIX fairly low in the $20 range, it may be difficult to find a credit spread to take advantage of the bullish holiday bias, but let’s see what our scanner finds…
If you’re looking for a quick trade that gives you exposure to the Oils/Energy sector, you have ticker OKLO to turn to.
The 18-JUL $55 strike has a delta of less than 30 and has 1,279 in open interest and 179 volume. If a cash-secured put isn’t in your price range, you can convert this to a spread by purchasing the $50 strike, creating a bull put spread, like this: SELL -1 VERTICAL OKLO 100 18 JUL 25 55/50 PUT @1.64 LMT MARK
That spread gives you $164 in credit, and the trade gives you a max risk/loss of $336 if OKLO closes below $50 at expiration.
While that risk-to-reward ratio may not seem to be in your favor, you are trading profits for potential safety. You’re selling a strike that is over 10% out of the money (current price is $62.02). You’re giving the stock plenty of room to move lower while you wait for the theta decay to kick in. Of course, the spread value decreases quickly (what you want) if OKLO continues to move higher.
Is a 10% buffer to the downside enough room? The ticker does have a beta of 2.54, so in theory, that means it moves about 2.54x the broader S&P 500. That still means the S&P 500 can move lower by about 3.93% before OKLO moves down 10%. That, of course, assumes it moves in the same direction as the S&P 500 with a perfect correlation. There’s always the risk that the Middle East settles down in the coming days and the oil/energy stocks move lower. The last couple of pivots happened around $55, so I’m still counting on support at that level, even if the conflict calms down.
The next few days may start slow, but the real opportunity lies in sticking to the plan: respect your support/resistance levels, size for volatility, and lean on that post-holiday drift. Let’s see if the markets deliver.
