SPY had a range of 389 to 402 with a close at 395. We had FOMC and Papa Powell gave us the expected 25 BPS hike and released the Economic Projections. This is where the juicy data was and it showed some interesting data. Screen Shot 2023-03-26 at 9.27.57 PM.png200.12 KB Here are the key things I see:
GDP has been lowered in 2023 and 2024
Unemployment is expected to go up this year and next from current levels.
PCE Inflation ticked slightly up for 2023
Fed Funds Rate was unchanged at 5.1 for 2023, and that is the first time we have not had a revision upwards in a year. This signals that a pause is coming very very soon.
No Rate cuts for 2023 have been signaled in the projections.
So the market continues to price in rate cuts in 2023 even after JPow said that is not going to happen. I am honestly sticking with JPow and not trying to side with the market estimates. The market does keep blasting higher in tech so it is clear that this narrative is working.
One thing is for sure, we are in the middle of a transition between inflation to recession theme. The volatility will be wild so keep it light on any trades. Don't pick a side just yet imo.
My Prediction - Play light and fast on any trades. I am building some small positions in longer term put positions in various names including QQQ, AMD, BX and some others.
Economic Data this Week (all times are EST)? -
Check the full calendar here. No Fed Speakers this week. They are in a blackout period: stonks.chat/feed/catalysts
Monday - Dallas Fed Manufacturing at 10:30am
Tuesday - Wholesale and Retail Inventories Data at 8:30am
Tuesday - CBI Consumer Confidence at 10am
Wednesday - Fed Barr Testimony at 10am
Thursday - US GDP at 8:30am
Thursday - Corporate Profits at 8:30am
Friday - EU Inflation at 5am
Friday - PCE Inflation Data at 8:30am
Friday - Chicago PMI at 9:45am
Friday - UoM Confidence at 10am
Current Positions and Plays -
I am holding some QQQ, AMD, CAT, FEZ, and BX puts for 30+ days out and are close to ITM. I have 2 sets of puts for QQQ, one is in April that is pretty OTM, and June that is not too far out of the money. I am looking at holding these positions this week. If we get a major move down, I will look to book some profits on them. If we continue upward, I will need to move on from the QQQ April puts and roll that money into the June ones.
SPY Technicals -
SPY Technicals - The 30 min, 1 hour, 4 hour and Daily are neutral.
SPY closed above the bear market trendline and the 200MA on the Daily chart.
SPY Fibs for Dec 2022 low to 2023 high (current rally) - Purple fibs on the chart.
401 is the .382
391 is the .618
396 is the .500
SPY Fibs for ATH to June 2022 low - 389 is the .236 line. 407 is the .382 line. Light green fibs on the chart.
SPY Fibs for COVID low to ATH - 380 is the .382 line. 416 is the .236 line. Gold fibs on the chart.
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