Financial News vs. Noise
QRA was slightly bullish and Powell stuck to script, which I guess is also bullish. The Magnificent 7 accounted for 65% of the S&P 500 gain, so I guess all is right with the world again. The $112 Billion refunding was just below expectations of $114 Billion and the market also seemed to like that the Treasury shifted the percentage of 10 yr lower and 3 year higher. I suppose you could say some of the economic releases support the Fed being done, and the Fed also indicated they are probably done. Some pretty interesting closes though. First, the S&P, which broke through 4200 but stalled at the 200 day.
Could see this going either way, but after 3 up days in a row my bias would be to the short side. However, this morning we are popping above, so my bias could change pretty quickly.
The NASDAQ 100 and Dow both stalled at the 20 day EMA, not nearly the import of the 200 day, but still could be significant. On the other side, IWM undercut and rallied above the 10 day, so that could be buyable here.
Silver (SLV) had a wild ride, but closed right below the 50 day.
Gold (GLD) right below the 10 day.
Gold miners (GDX) below the 50 day.
VIX undercut and rallied above the 50 day, by 1 cent.
So, besides IWM, everything else is setting up bearish. I currently have no short positions as the day after FOMC can get pretty interesting, but as I said above, my bias will be on the short side. However, that’s just a bias, if these guys all move above the respective MAs then we move with them.
I traded TLT intraday when it moved above it’s 10 day and will be watching today to see if it can move above the 20 day EMA.
Regional banks (KRE) didn’t get much of a bounce, but if rates come down and equities stay bid, then these guys can bounce. I hope they do as my short regional bank ETF should be out in a couple of weeks and I would much prefer to seem them at highs.
With rates coming down and the Dollar coming down I will be paying a lot of attention to gold and silver, and the miners. Not only do you get the impact from a lower Dollar but you can get a boost from Middle East turmoil.
Some earnings movers setting up in interesting spots. ROKU I did take a short after hours as it rallied up to it’s 50 day and failed. I do love shorting massive earnings pops that fail at key areas, but this may not be the day for it as market’s look pretty bullish this morning.
QCOM and FSLY are ones to watch as they are starting to curl above their 200 days.
TSLA is another one to watch. I had a reporter ask me yesterday if it should be removed from the Magnificent 7, to which I replied no. This morning it is breaking through it’s 10 day.
OSTK is another to watch. I got stopped out of it yesterday, but seeing some insider buying and the FinTwit guys love it.
Also going to be watching NVO and LLY, they haven’t been doing much lately but perhaps NVO earnings will shake things up.
Remember, AAPL earnings today after the close.
News vs. Noise
The “door still open” part is a potential problem. Fed Signals Yield Rise Reduces Need to Hike, But Door Still Open-Bloomberg
Jeff Gundlach says ‘massive interest-expense problem’ could cause the next U.S. financial crisis-MarketWatch
Servicing the country’s debt has become increasingly expensive as Jerome Powell’s Fed has attempted to cool the economy by raising key interest rates over a relatively rapid period, from at or near 0% to more than 5%.
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