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Thursday, May 4, 2023

The Fed Continues To Throw Gasoline On The Fire

The Fed Continues To Throw Gasoline On The Fire 

The Fed raised another 1/4 point as expected, and they left the door open for further interest rate cuts. 

Bloomberg immediately reported that as "hawkish" (as in a pause), but the lame stream media had to try and save the "one and done" story they were pushing all week. 

What was interesting to me, is that Bloomberg already had their statement prepared, when I thought they had to wait for the actual release of the statement, like everybody else? Apparently not!  

Then came Chairman Powell's speech:

The market sure didn't take, as encouraging, or hawkish,

and to make matters worse; no sooner than the market closed, bad news was released on yet another failing bank. 

PacWest Bankcorp 

Bitcoin Rises as Latest Teetering U.S. Bank Sends Traders to Crypto Haven 

We also saw scared retail money continue to flee to gold, as I watched it spike to around the 2070 level 

I can't help but wonder where we would have ended the day, if the bad news hadn't been withheld  until after the close. 

No doubt we would've seen a bit more selling.... but market futures were not seen breaking any major support levels, and this morning we see the market ignoring Chairman Powells failings, and S&P 500 market futures are once again being propped up above the beloved 4100 level, in anticipation of all things Apple earnings! LOL 

China and tech both up

 The $HSI (The Hang Seng) was up 1% overnight. That doesn't make much sense from a technical standpoint, after the index was down 1% the day before, but it looks like some post holiday bargain hunting. 

$EEM (mostly china) is trading just below the 50 day ma, so that's something to watch today. 

I believe that needs to pull back more. 

Financials and Bank Stocks

This is obviously something to watch. Remember when I remained bearish on financials even as it rallied over the past 2 weeks? Well if I had been short, that bet would finally be paying off! 

$FAZ (3X Leveraged Financial Bear) - not suggesting you should pile into this one. 

All Eyes on $AAPL 

 As I laid out last week, the entire market hinges on the $QQQ, and FAANG stocks. 

Dip buyers always rush in, but let's assume that 90% of trading is performed by algorithmic trading programs, which are programmed by teams of tech gurus. Now, the market action makes perfect sense! 

Take Care, 


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