Executive Summary

With the Fed's so-called “blackout period” before the FOMC’s July 29-30 meeting, macro traders and crypto fund managers have an urgent decision matrix to solve. The rate cut probability now sits near 5.2% with market positioning looking crowded, as per our YardCharts technical probability distributions, suggesting three key signals for multi-asset portfolio allocation.

Key Takeaways:

Gold likelihood of the up has 62% and a worst-case maximum drawdown of -2.1%

Bitcoin is still range bound at $108k with increased Volatility risk (-8.4% potential drawdown)

Equities are pressured with 58% probability for the S&P 500 to gain. Another high wave will dominate on Wednesday, as we see a broader recovery in most markets.

FOMC Meeting Schedule & Market Pricing

The next scheduled policy meeting of the Federal Reserve is on July 29-30, 2025, and its official “silent period” is from 0:00 EST on July 19 to 23:59 EST on July 31. During this blackout period, Fed policy makers cease giving public speeches, leaving traders to rely on the revelation of technical charts and probability models.

The market-implied probability of no cut was given at 94.8% (unchanged at 5.00-5.25%) vs 5.2% odds for a 25bp cut. This creates three distinct scenarios:

Status Quo (95% probability): NO CHANGE to rates, data-dependent messaging

Dovish Surprise (5% probability): 25bp cut surprise, signal policy pivot ‘Actuarial’ cuts, like May…...NOT otherwise…24-Aug 5-12 Westpac Banking Corporation | Westpac Institutional Bank….. valid the key reasons why we went to two cuts rather than one in May is the US escalated trade tensions Overview Our group economist Callum Pickering published a great note recently laying out the case for an OCR cut from the perspective of “central bank actuarial mathematics” It was impressive, and you should read it.

Hawkish Shock (<1% likelihood): Increasing hawkish chatter indicates a lengthening of the soft landing stance.

Market Sentiment Analysis

Equity Markets & Volatility

S&P 500 is up 49 basis points as of the close of the day before the FOMC announcement, according to historical data, which some analysts call the “pre-announcement” drift. Yet Bank of America’s most recent fund manager survey shows cash allocations now down to 3.9%, a contrarian sell signal that also points to near-term positioning stress.

The VIX term structure has a story: the day before FOMC announcements, VIX1D spikes +61.4%, only to crumble -24.8% post-release. This “spike-and-fade” pattern is a signal of enhanced short-term volatility costs.

Dollar & Treasury Dynamics

The DXY has been 10 straight sessions in reversal since not worse than expected CPI data, and markets are pricing “higher for longer” scenarios. The spread to 10-year real rates, at 2.31%, is now near its yearly high, which increases duration risk across fixed income portfolios.

Safe Haven Assets

Support for gold has emerged around $3,340/oz while the dollar’s strength has begun to stabilise. In the past, precious metals did well when the market was pricing in such cuts, which makes the current positioning pretty interesting given the low chances of July easing.

Crypto Asset Behavior

Bitcoin consolidates around $108k as traders wait on FOMC. BTC Volatility Booms on Fed Day. Research has shown that BTC volatility increases markedly when the Federal Reserve makes announcements, with clear directional notes of “hold steady = pullback” and “cut rates = rally.”

YardCharts Technical Analysis & Price Probability

YardCharts is focused on stock and cryptocurrency trend analysis and offers probability-based price forecasts based on advanced technical indicators, momentum signals, and market structure analysis. The system analyses price volume, support resistance, and cross-asset correlation to produce directional probabilities.

Technical Methodology:

Stock Analysis: YardCharts follows institutional flow, earning momentum, and sector rotation tendencies

Crypto Analysis: On-chain metrics, futures positioning, and correlation breakdowns with traditional assets

Probability Generator: Using Far Out-of-the-Money Options along with Ultra Short Term instruments against Volatility to Construct a Time Series-Based Model

Scenario-Based Portfolio Allocation

Outlook A: Hold Steady + Data Dependent (94.8% probability)

Recommended Weights:

US Equities: 45%

Cash: 20%

Gold: 15%

Short-term Treasuries: 10%

Crypto: 10%

So I would hold the focus on low-volatility dividend stocks and the AI sector leaders that also dominate in smaller niche markets and have “defensive” characteristics.

Scenario B: “Surprise 25bp Cut” (5.2% probability)

Obese Nasdaq growth, high-beta tech, and crypto (BTC, SOL) for maximum leverage on dovish surprise.

Case C: “Hawkish Jolt” (<1% chance)

Defensive posture with 35% cash, 25% short-duration Treasuries, and hedges (SDS, GLD puts).

Risk Monitoring Framework

Data Dependencies:

July 25: PCE inflation data

July 26: Consumer confidence index

July 30: FOMC statement analysis

Technical Triggers: Monitor the support/resistance levels from YardCharts trend analysis. Keep an eye on VIX going 17→20 for regime-change thresholds.

Sizing: Monitor live probability updates from YardCharts to scale exposure accordingly with evolving technical environment and momentum changes.

Action Items

Short-Term: Use YardCharts stock and crypto analysis tools to spot high-probability trades

Setup: Track ptime probability updates in YardCharts for different-sized contract positions

Track: Keep up with real-time technical signals through Jul 30 for tactical allocation changes

A combination of low rate cut odds with extreme positioning and multiple resistance obstacles makes up this intricate risk-reward condition. “Technical” Probabilities are what YardCharts uses to navigate this central inflection point, identifying probabilities of various price movements, rather than directional bias.

This piece uses technical probability models provided by YardCharts for stocks and cryptocurrencies. History is no indicator of future performance.