Last night I said that the bell saved the markets from further downside. This morning I looked like a fool being as pre-open futures were showing super strengths in anticipation of the Fed's statement.
The open quickly faded to lows continuing yesterday's weakness like I anticipated. Then the Fed statement came out SUPER bullish (more on that later) and markets took off.. I told members to watch how markets behave towards the morning highs... The SPX and Nasdaq labored and finally got to those morning highs only to revisit the day lows. Meanwhile, the Small caps (my favorite gauge) never regained the open highs. Sure we still have the Nasdaq green BUT not many mention that two heavy-weights in that index are up over 5% each artificially skewing and showing strength that is NOT index-wide but rather single story driven: Amgen and ExpressScripts.
Tomorrow, we have claims ahead of the open. I don't think they will move markets. The weakness should continue. I am still more comfortable shorting than being tightly long.
Why was the Fed statement Bullish?
Apple never even got close to challenging the 100.
The S&P 12 month weekly chart continues to show the cusping trend I mentioned last week:
Here are the variables on my radar: Geopolitical events dominate my list of worries in order of seriousness:
This week we may get information that changes the macro but it's a LONG shot. I anticipate that if we do change it would be to revise the downside risk: change it from simple sell offs to much scarier option. Until then: "so much happen yet
NOTHING HAS CHANGED" & I stick with my macro thesis and trade the ranges at play.
I will update the members in the am with all the new levels to trade this week.
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Nic.
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