-This was one a hell of a month! Great fear + uncertainty + rising oil and gold + inflation + FED uncertainty + War + OPEC+ agreement and etc etc.
-Thankfully managed to make a couple of profitable trades, especially on spy! Now let's see what is waiting for us in near future and the reason behind today's rise.
1) We rose today due to yesterday's SOTU where Biden emphasized the importance of dropping costs for the middle-class which made people happy, due to the high inflation everyone was triggered by high prices so he managed to hit a sweet spot!
2) FED's Powell talked about how the U.S is not going to directly get affected by the Russian sanctions and that OIL prices are not a threat. He also mentioned that inflation is somehow under-control.
3) The unemployment data came out pretty positive! We are up in employment which was triggered by high manufacturing + retail sales.
Outcome: Let's sell some short-term put spreads, lads and gents!
Alright Caldoon, but what the hell to expect next week or next month?
1) Don't expect Macro-Economy to just forget what have had happened in these past few days. The long-term effect of sanctions will definitely be negative and the USO is still rising although it dropped a bit. U.S and Europe are banning Russian gas and oil from everywhere and that will definitely drag Europe down soon, U.S might stay reluctant for a while due to OIL reserves but even then like we mentioned, USO is rising!
2) The inter-bank loan system called Swap Lines which are used by banks to lend each other money had a huge rate increase. That was due to uncertainty and fear in the market. No bank felt confident to pull out cash and lend it to anyone. It was feared that this might bring Financial Sector down which would drag the whole SP500 with it but thankfully for now it chilled down. However, the sanctions and its negative effects might drag it up again.
3) No matter what Powell says inflation is still high, the savings rate in consumers is very low which means people are not really left with much money in their pocket. That will definitely affect Q1 2022 retail sales
4) Not just retail sales but whole GDP is forecasted to show 0% growth, repeating myself, it is expected that we will have zero growth. That is scary isn't it? High inflation Low growth and volatile unemployment, that might bring the stagflation (recession) in the game which we mentioned in previous post.
So in total, the situation is pretty bearish. We are bearish on Mid-term basis on SP500 and Nasdaq!
-Thankfully managed to make a couple of profitable trades, especially on spy! Now let's see what is waiting for us in near future and the reason behind today's rise.
1) We rose today due to yesterday's SOTU where Biden emphasized the importance of dropping costs for the middle-class which made people happy, due to the high inflation everyone was triggered by high prices so he managed to hit a sweet spot!
2) FED's Powell talked about how the U.S is not going to directly get affected by the Russian sanctions and that OIL prices are not a threat. He also mentioned that inflation is somehow under-control.
3) The unemployment data came out pretty positive! We are up in employment which was triggered by high manufacturing + retail sales.
Outcome: Let's sell some short-term put spreads, lads and gents!
Alright Caldoon, but what the hell to expect next week or next month?
1) Don't expect Macro-Economy to just forget what have had happened in these past few days. The long-term effect of sanctions will definitely be negative and the USO is still rising although it dropped a bit. U.S and Europe are banning Russian gas and oil from everywhere and that will definitely drag Europe down soon, U.S might stay reluctant for a while due to OIL reserves but even then like we mentioned, USO is rising!
2) The inter-bank loan system called Swap Lines which are used by banks to lend each other money had a huge rate increase. That was due to uncertainty and fear in the market. No bank felt confident to pull out cash and lend it to anyone. It was feared that this might bring Financial Sector down which would drag the whole SP500 with it but thankfully for now it chilled down. However, the sanctions and its negative effects might drag it up again.
3) No matter what Powell says inflation is still high, the savings rate in consumers is very low which means people are not really left with much money in their pocket. That will definitely affect Q1 2022 retail sales
4) Not just retail sales but whole GDP is forecasted to show 0% growth, repeating myself, it is expected that we will have zero growth. That is scary isn't it? High inflation Low growth and volatile unemployment, that might bring the stagflation (recession) in the game which we mentioned in previous post.
So in total, the situation is pretty bearish. We are bearish on Mid-term basis on SP500 and Nasdaq!