Thursday, November 3rd, 2022 Market Preview
FOMC Recap -
What a day. What a day. What a day...
FOMC is always a very entertaining day and today did not disappoint. The overwhelming consensus was that JPow was going to buckle under the pressure and give a hint that a possible slow down in rate hikes was coming in December. He made sure that that was not going to happen by making the following statements:
FOMC is always a very entertaining day and today did not disappoint. The overwhelming consensus was that JPow was going to buckle under the pressure and give a hint that a possible slow down in rate hikes was coming in December. He made sure that that was not going to happen by making the following statements:
- "It is very premature to think about Pausing. We have a ways to go."
- "I expect us to continue to update the summary of economic projections upward in December"
- "I don't see the case for softening in the labor market."
- "If we overtighten, we can use our tools to respond."
- "Has the window for a soft landing narrowed? Yes."
And on and on and on he went with the hawkish tone. His final statement was very direct in letting market participants that the Fed is not close to pausing.
So the focus now shifts back to the economic data releases. We have a big jobs data release on Friday and then CPI next week. But he needs to see a few MONTHS of slowing before he will think about slowing.
In summary, fade the rip is back on the table until the June Lows on SPY are retested.
So the focus now shifts back to the economic data releases. We have a big jobs data release on Friday and then CPI next week. But he needs to see a few MONTHS of slowing before he will think about slowing.
In summary, fade the rip is back on the table until the June Lows on SPY are retested.
Current Positions and Plays -
- I entered a strangle right before FOMC and it ultimately worked out well. I entered some 11/11 SPX puts when JPow made it clear that he was not pausing. They are up nicely.
- I went ahead and sold my SPX puts for March and took a nasty loss on the NEM call options. With the DXY jumping after FOMC, I don't need to be in a hurry with this one.
THE PLAYS OF THE DAY for THURSDAY for SPY:
- JPow brought the pain, and then brought it again. Then he said it one more time to make sure that everyone knows that he is bringing in the pain.
- I am going to look at fading any rip that happens now in the market. It sure looks like the market will be retesting the June lows again very soon. Looking at entering puts for the end of the year. My swing trading strategy is back!
Economic Data this Week (all times are EST)? -
- Check the full calendar here: stonks.chat/feed/catalysts
- Fed Speakers are in a blackout period so we won't hear from them until 11/04.
- Friday - Nonfarm Payrolls data at 8:30am ⚠️
SPY Technicals -
- SPY Technicals - The 30 min and 1 hour are close to oversold. 4 hour and Daily are neutral.
- SPY Fibs for ATH to June 2022 low - 390 is the .236 line and was met with rejection this week. 362 is the .000 line. Bulls keep recovering this line. This is proving to be solid support now.
- SPY Fibs for COVID low to ATH - 380 is the .382. 349 is the .500. That .500 level is the real deal and the current YTD low.
- SPY - The 200 Weekly SMA is 361. The bulls need to keep this level.
Levels I am Watching
- $SPY - levels 363 > 366 > 370 > 373 > 376 > 380 (major level) > 383
- NOTE: I am turning into a swing trader for various reasons, so please keep that in mind moving forward. My options plays will be always a few weeks out because of this.
- This is not financial advice
SPDR S&P 500 - SPY
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