Trends still could allow some upward movement; However, FED Day
I've said it a dozen times... remember that nothing annihilates a technical analysis like key Economic Data. So with that, at 2pm EST, it is the interest rate decision, though really I think it'll be the forward guidance that drives the market up or down.
The last time we heard Jerome Powell talk (during his Congressional Hearing) he was rather Hawkish and discussing raising the target interest rate expectations as inflation is just not coming down as much as they had hoped. Then we had the banking crisis, which has now in terms of stock valuation fully recovered and if the current trajectory continues will actually be HIGHER than prior to the issue. It certainly appears that risk appetite is in full hunger mode.
I am stll sitting in a short at 4019. In hindsight I should have set a profit stop once we got well below it yesterday, but did not. If we end up higher on the day with more room for upward movement I may take my loss on that one. I did get profit stopped out of my 6E trade, but continue to believe that is set for a reversal move back down. I may take a day off of trading that one though.
Either way, the trends into today are;
Last Macro Trend Signal Spots
30m - 4027 Downtrend (3/22/2023) Higher Low
1Hr - 3977 Uptrend (3/20/2023) Higher High
2Hr - 4008 Uptrend (3/21/2023) Higher High
3Hr - 4008 Uptrend (3/21/2023) Lower High*
4Hr - 4017 Uptrend (3/21/2023) Lower High
6Hr - 4028 Downtrend* (3/7/2023) Lower Low
12Hr - 4052 Downtrend (2/21/2023) Higher Low
Daily - 3955 Downtrend (3/9/2023) Higher Low
Weekly - 4366 Downtrend (2/14/2022) Higher Low
Keep in mind that these trends are along the ESM from the 4 hour and below. So the discrepancies between the ES! overlay and ESM specifically are annotated in an *
The Long Position;
Currently I don't have much in terms of a long position sentiment. I think we've gone up too much, too quickly, on low volume. I can't say I'd find a reason to go long at this point, unless the FOMC comes out extremely Dovish and talks about cutting rates, which I don't foresee happening with the increased inflation pressure and appearance of a full recovery of the financial system.
The Short Position;
On a technical level we should at LEAST be having a calm, small whipsaw day, but with the FOMC coming out I don't see that happening, so the technical analysis says we should at least have a down day if we go one direction or the other. Additionally, if Powell comes out hawkish it could really send the market spinning back down after way to much upward risk appetite.
Economic Data;
It's a Fed Day, and includes forward projections, so 2pm EST is going to be huge.
My sentiment is;
Shorter Term - Bearish
Short Term - Bearish
Medium Term - Bearish/Neutral
Long Term - Neutral
Remember your risk management plan, be careful trading into the FOMC decision, and safe trading!
The last time we heard Jerome Powell talk (during his Congressional Hearing) he was rather Hawkish and discussing raising the target interest rate expectations as inflation is just not coming down as much as they had hoped. Then we had the banking crisis, which has now in terms of stock valuation fully recovered and if the current trajectory continues will actually be HIGHER than prior to the issue. It certainly appears that risk appetite is in full hunger mode.
I am stll sitting in a short at 4019. In hindsight I should have set a profit stop once we got well below it yesterday, but did not. If we end up higher on the day with more room for upward movement I may take my loss on that one. I did get profit stopped out of my 6E trade, but continue to believe that is set for a reversal move back down. I may take a day off of trading that one though.
Either way, the trends into today are;
Last Macro Trend Signal Spots
30m - 4027 Downtrend (3/22/2023) Higher Low
1Hr - 3977 Uptrend (3/20/2023) Higher High
2Hr - 4008 Uptrend (3/21/2023) Higher High
3Hr - 4008 Uptrend (3/21/2023) Lower High*
4Hr - 4017 Uptrend (3/21/2023) Lower High
6Hr - 4028 Downtrend* (3/7/2023) Lower Low
12Hr - 4052 Downtrend (2/21/2023) Higher Low
Daily - 3955 Downtrend (3/9/2023) Higher Low
Weekly - 4366 Downtrend (2/14/2022) Higher Low
Keep in mind that these trends are along the ESM from the 4 hour and below. So the discrepancies between the ES! overlay and ESM specifically are annotated in an *
The Long Position;
Currently I don't have much in terms of a long position sentiment. I think we've gone up too much, too quickly, on low volume. I can't say I'd find a reason to go long at this point, unless the FOMC comes out extremely Dovish and talks about cutting rates, which I don't foresee happening with the increased inflation pressure and appearance of a full recovery of the financial system.
The Short Position;
On a technical level we should at LEAST be having a calm, small whipsaw day, but with the FOMC coming out I don't see that happening, so the technical analysis says we should at least have a down day if we go one direction or the other. Additionally, if Powell comes out hawkish it could really send the market spinning back down after way to much upward risk appetite.
Economic Data;
It's a Fed Day, and includes forward projections, so 2pm EST is going to be huge.
My sentiment is;
Shorter Term - Bearish
Short Term - Bearish
Medium Term - Bearish/Neutral
Long Term - Neutral
Remember your risk management plan, be careful trading into the FOMC decision, and safe trading!
Comment:
Well after a brief up and down, looks like we go into the decision pretty close to zero
Comment:
25 bps hike.
Lowered interest rate projections lowered for the most part.
Wording is a bit tricky in the statement, as it stopped talking about rate hikes specifically, but put a more generalized, "In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments."
Lowered interest rate projections lowered for the most part.
Wording is a bit tricky in the statement, as it stopped talking about rate hikes specifically, but put a more generalized, "In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments."
Comment:
I just keep thinking that the data doesn't support this belief we are going Dovish, regardless of bank issues. It'll leave inflation lasting much longer and causing the pain to be much steeper. I hate to be a pessimist (or bear if you want to call it that), but I just don't get this belief that the all clear signal is here.
Comment:
Jerome Powell - "We expect banks to have to tighten credit lending, which will help reduce growth because of the risk to the banking sector."
Also Jerome Powell - "SVB was unique in how that bank functioned and doesn't reflect the general banking sector."
Mmmmmmmmmm............ I don't think those two statements add up, good sir.
Also Jerome Powell - "SVB was unique in how that bank functioned and doesn't reflect the general banking sector."
Mmmmmmmmmm............ I don't think those two statements add up, good sir.
Comment:
Powell did say that there has been zero expectations of rate cuts by the end of the year, in spite of the market at this point pricing in 2 rate cuts by the end of the year.
Comment:
I cashed out for $100 on this dip. Phew... that was close. I'd rather miss out on more down than have held into a rally back up. I'll trade another day. Close one for sure.
Comment:
So I went back in short at 4020 on the second dip back down. Didn't want the first dip to be a fluke, I am still looking for this to hit somewhere around 4059 or below before I cash out, but we shall see where we go overnight I suppose.
Overall it looks like while Jerome Powell was proclaiming all is well, Janet Yellen is did not have such sentiment in another speech. I am just glad to see all is well in the trends, in spite of what appeared to be some clear violations.
Overall it looks like while Jerome Powell was proclaiming all is well, Janet Yellen is did not have such sentiment in another speech. I am just glad to see all is well in the trends, in spite of what appeared to be some clear violations.