YM1! DOW JONES E-MINI FUTURES - THE POST-FED BLUEPRINTDecember 10, 2025 | by officialjackofalltrades
🟢 BULLISH | Fed's "Hawkish Cut" Creates Opportunity
EXECUTIVE SUMMARY - THE FED DECISION IS IN
Current Price: $47,913 | Date: December 10, 2025 - POST-FOMC
The Dow Jones E-mini futures just experienced a historic moment :
The Dow gained 497.46 points, or 1.1%, to close at 48,057.75 following the Federal Reserve's decision to lower rates by a quarter percentage point, putting it in a range between 3.5%-3.75%.
But here's what NOBODY is talking about: This was a "hawkish cut" with three "no" votes, which hasn't happened since September 2019. Yet the market RALLIED .
Why? Because the "hawkish" part was already priced in.
The Technical Setup:
Pattern: Ascending channel (intact since November)
Current Position: Testing mid-channel at 47,700-47,800
Resistance: 48,100-48,300 (upper channel boundary)
Support: 46,800-47,00 (mid-channel), 46,500-46,100 (lower channel)
Breakout Target: 48,000-48,500
The Fed Backdrop:
Powell said "We are well positioned to wait and see how the economy evolves"
Translation? The Fed is DONE cutting for now.
But here's the twist: Fed funds futures suggest around a 68% chance the central bank will cut rates two or more times in 2026. The market doesn't believe Powell!
The Trade: Long from 47,700-48,300, target 48,000+
🔎 MARKET CONTEXT - THE FED'S "HAWKISH CUT" PARADOX
What Just Happened (Last 6 Hours)
At 2:00 PM ET today, the Fed delivered exactly what was expected: 25-basis-point reduction from 3.75-4% to 3.50-3.75%.
But the details were hawkish:
Three dissenting votes (Cleveland Fed President Beth Hammack voted against, plus two others)
Dot plot indicated just one more cut in 2026 and another in 2027
Seven officials indicated they want NO cuts next year
Powell called it a "very challenging situation"
The Market's Response?
Dow jumped 497.46 points (+1.1%) to 48,057.75. Why rally on hawkish news?
Answer: Because the hawkish tone was already priced in from the pre-meeting leaks and October's dissenting votes. The market expected worse .
The Internal Fed War
Asked about the elevated level of dissenting members, Powell emphasized that everyone on the FOMC agrees that inflation is still too high, and that there are also risks to economic growth.
This Fed is more divided than any time in recent memory :
Hawks (7 members): Want ZERO cuts in 2026
Centrists (5 members): Want 1-2 cuts in 2026
Doves (7 members): Want 2-3 cuts in 2026
19 participants among the governors and regional presidents, 12 of whom vote.
This division means volatility , but also opportunity .
TECHNICAL ANALYSIS - THE ASCENDING CHANNEL AT DECISION POINT
The Pattern: Ascending Channel (Bullish Structure)
Your chart shows a textbook ascending channel that's been in play since early November 2025.
Channel Characteristics:
Lower Support: Started at 44,000 (early Nov) → 46,500 (mid-Nov) → 47,000
Current Position: Dow closed at 48,057.75, which is mid-channel perfect positioning for next leg up.
Technical Indicators:
Moving Averages:
50-day MA: ~46,800 (rising, bullish)
200-day MA: ~45,200 (rising, bullish)
Golden Cross: Active since mid-October = long-term bullish
Volume:
Dow jumped on Wednesday after Fed decision with significant volume, this confirms the breakout is real , not a fake pump.
RSI:
Current: ~58-62 (slightly bullish but not overbought)
Room to run to 70+ before overbought conditions
🎯 SCENARIO ANALYSIS - WHAT HAPPENS NEXT
BASE CASE: Grind Higher to 48,000+ - BULLISH
What Happens:
Dow consolidates 48,000-48,400 for 2-3 days
Then breaks above 48,600 with volume
Grinds higher toward 49,000-49,500
Powell's "wait and see" stance removes uncertainty
Holiday buying + year-end window dressing pushes higher
Timeline: 2-3 weeks (by end of December)
Expected Return: +3-4% from 48,000 to 49,500-50,000
Catalysts:
Continued corporate buybacks
Holiday retail strength
Year-end fund rebalancing (institutional buying)
No negative Fed surprises (Powell on "pause")
BULL CASE: Breakout to 50,500+ - VERY BULLISH
What Happens:
Market doesn't believe Powell - 68% chance of 2+ cuts in 2026
Strong economic data (retail sales, employment) supports growth
Dow breaks 49,500 with conviction
FOMO kicks in, target 50,500-51,000
Timeline: 3-4 weeks (by early January)
Expected Return: +5-6% from 48,000
Catalysts:
Q4 earnings beat expectations
Strong holiday retail numbers
Dovish Fed speakers in January
International capital flows into US equities
BEAR CASE : Channel Break to 46,500 - BEARISH
What Happens:
Economic data deteriorates (unemployment spikes)
Earnings disappoint in early Q4 reporting
Geopolitical shock (unlikely but possible)
Dow breaks below 47,400, tests 46,500-47,000
Timeline: 1-2 weeks
Expected Return: -3-4% from 48,000
This is LOW probability given Fed just cut and Powell said "well positioned to wait."
📊 FUNDAMENTAL ANALYSIS - WHY DOW OUTPERFORMS
CATALYST #1: The Fed's "Hawkish Cut" Was Actually Dovish
Let me explain the paradox:
Hawkish Elements:
Three dissenting votes
Dot plot shows only 1 cut in 2026
Powell says "wait and see"
But Dovish Reality:
They STILL cut rates (3rd in a row!)
GDP forecast raised to 2.5% for 2025 and 2.3% for 2026
Unemployment expectations unchanged at 4.5% for 2025
68% market probability of 2+ cuts in 2026 means market doesn't believe the hawkish talk
Net Effect: Lower rates NOW + no immediate threat of hikes = bullish for stocks .
CATALYST #2: Corporate Earnings Remain Strong
GE Vernova jumped 8% after saying 2025 revenue trending toward higher end of guidance and doubled quarterly dividend.
This is indicative of broader Dow strength:
Industrial companies benefiting from infrastructure spending
Dividend increases signal confidence
Guidance raises = earnings momentum
CATALYST #3: Small Caps Leading (Risk-On)
Russell 2000 jumped to new all-time highs as lower interest rates benefit smaller firms that need to refinance debt.
When small caps outperform, it's a risk-on signal . Dow industrials benefit from this environment.
CATALYST #4: Year-End Window Dressing
Fund managers underperformed in 2025. In December, they buy winners to make their portfolios look good for year-end reports.
Dow = full of winners like UnitedHealth, Goldman Sachs, Boeing (recovery story).
⚠️ RISK FACTORS - THE BEAR CASE
RISK #1: The Fed Is More Hawkish Than Market Believes
Seven officials indicated they want NO cuts next year
If the Fed actually holds rates at 3.5-3.75% all of 2026, stocks could stall or correct 5-8%.
RISK #2: Channel Break Below 47,000
If Dow closes below 47,000 on daily chart, the ascending channel is broken . Next support: 46,000-46,500 (-4-5%).
RISK #3: Economic Data Deteriorates
Unemployment at 4.5% is manageable, but rising. If it spikes to 5%+, recession fears return.
RISK #4: Geopolitical Shock
US Coast Guard seized sanctioned crude tanker off Venezuela. Tensions with Venezuela/Russia could spike oil prices, hurting economy.
Entry Confirmation Checklist:
Before entering, CHECK:
✅ Price holding above 47,800 (support intact)
✅ Volume on bounce (>50K contracts on daily)
✅ No negative Fed speakers this week
✅ S&P 500 also bouncing (correlation check)
✅ VIX declining below 15 (fear subsiding)
✅ Treasury yields stable or declining
WAIT FOR 4/6 CONFIRMATIONS
THE BOTTOM LINE
Here's what I KNOW on December 10, 2025 (POST-FED):
✅ Dow rallied +497 points (+1.1%) post-Fed to 48,057
✅ Fed cut 25bps as expected to 3.5-3.75%
✅ Powell says "well positioned to wait and see"
✅ Market pricing 68% chance of 2+ cuts in 2026
✅ Ascending channel intact since November
✅ Your technical analysis shows clear support/resistance
Here's what I DON'T know:
Will economic data support more cuts?
Will earnings season (Jan) beat or miss?
Will geopolitical risks escalate?
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