Hello Everyone,
Quick Note: The FED giveth and the market taketh away. Yesterday's massive rally was completed unwound in one session and provided a major BULL trap following the earlier BEAR trap. Yesterday's advance halted near last weeks highs and today buyers went into the witness protection program. Quite honestly, I was looking for a decent pullback today but not a complete unwind in one session although I certainly knew it was possible. I was asked yesterday by a member about changing my mind near the end of the session and quite frankly I replied with a very bold response NO. I didn't mean to demean I just wanted to emphasize the risk inherent after such a move within the current backdrop. My hope is that this prevented a major drawdown today from not chasing that move. Matt and I care deeply and share more comments than any other site by 10 fold. We try our best to be cordial and explain things but when the bullets are flying in a highly volatile market it's hard to deeply insightful. So please understand at times I will be blunt but will always follow up with further explanations - my apologies in advance.
As far as where do we go from here? I took time earlier this afternoon and posted a few options on the trading community (will discuss below as well) along with comments which I pasted below. Please take time to review.
The question for all of you to ponder, is what would be a catalyst to take the market back up to new highs? Make no mistake these moves up were driven by easy money policies correct? What is happening now with the FED? Certainly the market looks ahead but are all these upcoming actions by the FED priced in or nearly priced into the market - or are market participants just beginning to realize what may be in store? You decide and formulate a plan.
I don't have a crystal ball but caution is warranted until EVIDENCE changes. All evidence based opinions are welcomed as I'm not a soothsayer.
One thing I do know is that our economy is highly levered (when you consider all the gov't corporate and consumer debt). Rates have moved up substantially so think about how that will impact the economy. Think HARD
Please take a moment to look at the trade ideas.
