<p>Happy Sunday traders. This will be a brief plan due to the holiday shortened week, and it will be available for all to read. </p><p>Last week was dominated by FOMC and the hawkish outlook from Powell and the FOMC Statement last week, until Friday, when bulls came back with vengeance. I want to take a moment here to discuss last week’s FOMC before diving into the markets further. Briefly, however a gentle reminder of the ongoing 2025 special for all options. Click on the button below to claim this special!</p><div class="subscription-widget-wrap-editor"><div class="subscription-widget show-subscribe"><div class="preamble"><p class="cta-caption">Father Time's Chronicles is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.</p></div><form class="subscription-widget-subscribe"><input class="email-input" name="email" tabindex="-1" type="email" /><input class="button primary" type="submit" value="Subscribe" /><div class="fake-input-wrapper"><div class="fake-input"></div><div class="fake-button"></div></div></form></div></div><p class="button-wrapper"><a class="button primary" href="https://fathertimechronicles.substack.com/subscribe?coupon=e85c6344&utm_content=153495345"><span>Get 40% off forever</span></a></p><p><strong>The Fed</strong></p><p>Entering this past FOMC meeting, markets were anticipating four rate cuts through 2025. The Fed’s dot plot showed that as of now, they’re planning on cutting less than three times, most likely two 25bps cuts, coming at separate times throughout the year. Right now at my best guess, we likely see another rate cut in either January followed by a pause through the spring with another cut coming in either the early summer; or the Fed holds tight and doesn’t cut again until March followed by a late summer 25bps cut. (This is under the assumption the Fed sticks to their current dot plot showing two cuts coming in 2025, I think there is a real possibility there’s only one cut coming in 2025.)</p><p>The issue isn’t rate cuts themselves, as markets have shown their resilience the past couple of years. Defying historical norms, the three major indexes have shown strong record setting bull markets since the bear market ended in October 2022. The issue now, is what comes after the pause: likely future rate hikes. Inflation is clearly sticky and we’re already seeing hot prints again with in PPI & CPI recently. Into 2025, I think there is a real risk we see CPI move higher back towards 3.5%+. If that happens - how does the Fed respond? They will be inclined to raise rates, likely against immense political pressure coming from the Trump WH. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" href="https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff65cb2c6-60a8-4d21-8678-3b3036677502_1400x1040.png" target="_blank"><div class="image2-inset"><source type="image/webp" /><img alt="" class="sizing-normal" height="1040" src="https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff65cb2c6-60a8-4d21-8678-3b3036677502_1400x1040.png" width="1400" /><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg class="lucide lucide-refresh-cw" fill="none" height="20" stroke="currentColor" stroke-linecap="round" stroke-linejoin="round" stroke-width="2" viewBox="0 0 24 24" width="20" xmlns="http://www.w3.org/2000/svg"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg class="lucide lucide-maximize2" fill="none" height="20" stroke="currentColor" stroke-linecap="round" stroke-linejoin="round" stroke-width="2" viewBox="0 0 24 24" width="20" xmlns="http://www.w3.org/2000/svg"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>So in the face of sticky and (slightly) rising inflation, the Fed took the appropriate hawkish outlook, but fully acknowledging they’re likely not finished cutting rates. I do think this creates an interesting dynamic for US equities in 2025, and while I plan on diving further into this in greater detail in my 2025 Yearly Outlook articles, I would not be the least bit surprised if 2025 is closer to 2022 action versus the last couple of years. </p><p><strong>The Week Ahead ~ SPX</strong></p><p>Below is the long GP for SPX, which all paid subscribers have had access to since last Thursday, 12/19. Where did SPX open? And where did buyers immediately step in..? No, this is not a coincidence ;)</p><p>The LIS entering this week is 5865, which is the open from 11/6. <em>So far </em>Friday’s open below this level and the quick rally back has trapped sellers, but this only works so long as the level holds as support. So long as the LIS holds, SPX can complete a full retracement higher and begin grinding back towards 6100 → 6300 during the January OPEX cycle.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" href="https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F8d32cce4-8aa3-4280-bfca-f127a05c4eee_3286x1860.png" target="_blank"><div class="image2-inset"><source type="image/webp" /><img alt="" class="sizing-normal" height="824" src="https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F8d32cce4-8aa3-4280-bfca-f127a05c4eee_3286x1860.png" width="1456" /><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg class="lucide lucide-refresh-cw" fill="none" height="20" stroke="currentColor" stroke-linecap="round" stroke-linejoin="round" stroke-width="2" viewBox="0 0 24 24" width="20" xmlns="http://www.w3.org/2000/svg"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg class="lucide lucide-maximize2" fill="none" height="20" stroke="currentColor" stroke-linecap="round" stroke-linejoin="round" stroke-width="2" viewBox="0 0 24 24" width="20" xmlns="http://www.w3.org/2000/svg"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>If the LIS fails for SPX price is likely heading to demand, beginning at 5725. So if/when LIS fails expect a large sell, right around -150 points. Should the LIS fail, some of the weaker names of late like NVDA to lead the next leg down.</p><p><strong>CAT Analysis</strong></p><p>The one A+ long setup I like this week, only for core trades using January monthly calls, is CAT longs.</p><p>On Friday buyers stepped up at the daily 200SMA with a large increase in volume. Assuming Friday saw the end of the correction, so far -14% off YTD high, risk is now higher. So long as the 200SMA holds as support CAT can trade $376-380 → $400 through January OPEX.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" href="https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F6c522610-11d8-4b3e-abb0-9c2decccae3b_3286x1860.png" target="_blank"><div class="image2-inset"><source type="image/webp" /><img alt="" class="sizing-normal" height="824" src="https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F6c522610-11d8-4b3e-abb0-9c2decccae3b_3286x1860.png" width="1456" /><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg class="lucide lucide-refresh-cw" fill="none" height="20" stroke="currentColor" stroke-linecap="round" stroke-linejoin="round" stroke-width="2" viewBox="0 0 24 24" width="20" xmlns="http://www.w3.org/2000/svg"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg class="lucide lucide-maximize2" fill="none" height="20" stroke="currentColor" stroke-linecap="round" stroke-linejoin="round" stroke-width="2" viewBox="0 0 24 24" width="20" xmlns="http://www.w3.org/2000/svg"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><div class="captioned-button-wrap"><div class="preamble"><p class="cta-caption">Thanks for reading Father Time's Chronicles! 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