The FOMC
After yesterday's FOMC announcement, we got another nice relief rally.
This is typical, that the $VIX comes down; whenever the Fed announces their intentions. This offers some "clarity", and clarity is the opposite of uncertainty. Some times the rally is delayed until the next day, but this is the case, 90% of the time.
The lame stream media will tell you that the market rallied, because a 75 basis point rate hike was apparently taken off the table, after they had reported - earlier in the week - that the market had somehow priced in a 50% chance of a 75% hike? I saw that as more like a million to 1 chance, not 50%! Perhaps the market makers lowered expectations in order to beat expectations?
Judging by Chairman Powell lackadaisical attitude, over the past several months, how could anyone expect anything different than what the market was expecting?
Investor sentiment: Of course the bulls are trying to make yesterday's rally into something more than that, but investor intelligence is not looking too bright, according to the comments I'm seeing in my public twitter feed. I even got trolled by a follower, ahead of yesterday's close!
We’re going to 6200 no typo
— Matt "WOJAK" Trades | bosstrades.eth (@matt_trades) May 4, 2022
If you recall this is the same round number target the bulls set their goal at last time...
I even blogged on the subject on April 29th - Re: the $SPX 4300 level
The DOW was also sold at the 50 day moving average.
Until a real direction can be established then I'm going to use relief rallies like the one we saw yesterday, as selling opportunities.
I thought we might see a short squeeze on the heals of the fed announcement, and that's good enough for me! I told my people to sell it, and I took profits as well, and you see where futures are trading this morning... we're not exactly off to the races, as I though we might be, and with May OPEX only a couple weeks away! The window for a tradable rally has come and gone, unless we're looking at a low volume summer rally.
Until the $VIX returns to normal, I would remain cautious. Of course you're going to miss a tremendous short squeeze, once a bottom is confirmed, and that's where my expertise comes in, and all the charts you need to trade this market have already been tweeted to our private twitter feed.
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Good Luck, AA
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