A week of catalysts: Fed and triple witching under Elliott Wave analysis [Video]

The financial markets constantly adapt to liquidity dynamics, fundamentals, and the relative position of price. When price enters an inefficient zone, high-probability trading opportunities tend to emerge—provided the trader applies a robust technical framework.

Elliott Wave Theory provides such a framework: it helps interpret cycles, identify the current phase of market movement, and prepare decisions based on scenarios, confirmations, and controlled risk. Successful trading ultimately combines rigorous technical reading with emotional discipline.

This week, the focus is on three key instruments: EUR/JPY, SPX500 (ES futures), and WTI, in a context defined by the FED meeting and triple witching, two events that significantly impact liquidity and volatility.

Executive Summary

• Catalysts: FED decision/guidance and triple witching (expiration of futures and options).

• Methodology: Elliott Wave to identify impulsive/corrective phases, validation/invalidation levels, and liquidity context.

• Markets covered: EUR/JPY (bearish bias), SPX500/ES (bullish bias, buy pullbacks), WTI (bearish bias pending validation).

• Objective: Trade high-probability setups with clear rules and defined risk.

Macro and liquidity context

The FED meeting may reset expectations for interest rates, risk premium, and sectoral rotation, affecting order-book depth and trend continuation. Triple witching introduces portfolio rebalancing and hedging, often amplifying moves around openings, closings, and key technical zones.

In such conditions, discipline is crucial: wait for confirmation, avoid chasing, size positions appropriately, and follow the plan strictly.

EUR/JPY: Bearish bias toward 172.00 (Pending confirmation)

• Wave count: The pair is shaping a structure pointing to 172.00 as a potential Wave 2 completion, anticipating a bearish leg if confirmed.

• Trading plan:

  1. Wait for confirmation trigger.

  2. Place stops above invalidation levels.

  3. Manage risk considering volatility around events.

Risks: Unexpected FED outcomes, global equity surges, or carry-trade demand could negate the initial bias.

SPX500 (ES Futures): Primary bullish trend – Buy pullbacks

• Context: Trading at all-time highs, the index remains in an impulsive phase. Statistically, the edge lies in buying pullbacks into dynamic support.

• Rules of engagement:

  • Identify corrective substructures (ABC, zigzag, flat).

  • Enter upon breakout of the minor correction high.

  • Cancel trade if retracement exceeds invalidation threshold.

Liquidity note: Triple witching often drives sharp moves near market close; traders should stick to rules and avoid impulsive trades.

WTI (Crude Oil): Bearish setup under construction

• Bias: Developing bearish scenario, pending validation.

• Steps:

  1. Wait for clear technical confirmation.

  2. Evaluate retracement depth for better risk/reward.

  3. Protect with stops above invalidation level; scale out at intermediate supports.

Catalysts: Inventory reports, geopolitical headlines, and spreads in the energy market may alter timing and wave dynamics.

Risk management principles

1. Enter only on confirmation.

2. Define stop-loss/invalidation before entry.

3. Adjust size to volatility and event risk.

4. Document each trade (rationale, chart, levels) to reinforce emotional discipline.

Weeks with liquidity shifts like this demand a structured approach. Combining Elliott Wave Theory, price efficiency analysis, and strict execution can uncover measurable trading edges.