Today we heard from the Fed with the rate decision of (+) .50bps and the market made its feelings about that known. The question now is the same as always, “Now what?” Let’s take a look at that in our mid-week update.
Technicals + Order flow has me looking for a reversion to the mean/ test of resistance at & here is how I plan to trade it.
The technicals & order flow have me targeting a level to get short but we need to be patient. I think patience right now is important as we head into an FOMC meeting with the expectation of a 50bps rate hike. Which hasn’t happened in a while. If the FED says something that isn’t already priced in then things can be shaken up a bit.
With the SPY testing support, closing on a hammer candle (reversal pattern) with +15 million ($6.5B) late buy prints with confirmation today. As long as nothing is said during the FOMC that isn’t already priced into the market tomorrow. The SPY is set to revert to the mean (21EMA) and test resistance at the $430 level. Here is a trade idea you can potentially benefit from.
As we approach an expected 1/2 point hike, what are the trends that could benefit from the FOMC volatility? I have a lot I am keeping an eye on and am sharing those symbols with you in this update.
After the late April sell-off in many corners of the market, the dust settled and certain trends have shown themselves to be resilient and that is where we want to focus our attention. Buy the dip is never not true, it’s just that there needs to be an uptrend to do it. And now there are quite a few sell the rip opportunities in downtrends.
Facebook earnings may have surprised some and if bears are still on the run the next 2 days could bring another $5-6 of continuation, possibly more. Let’s map that out technically and see if we can get into and out of a trade before the Fed meeting on Wednesday.
Airbnb is reporting earnings tomorrow, and with the high implied volatility in addition to the big move that is expected, there is an opportunity in the options market to sell options.
The indexes hit new lows on the year today, which means we are easily one step from capitulation but at the same time, not far from a short squeeze. Today, we got to see a bit of the short squeeze in action, but, will it continue into tomorrow? There are many catalysts on the docket, including earnings reports from ABNB, AMC, EBAY, and more, along with the FOMC meeting on Wednesday. It’s a big week, so make sure you control your risk and keep an eye on all of the possible landmines!