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FOMC Day – 4 May, 2022

Market Outlook – Bullish bounce in a bearish formation. New support looks like 4165 with the rise into the thin volume profile noted below into 4225 and 4235. Short story? Buy the dips in the current cycle. Expect markets to chop around most of the day. Lots of bottoming on charts starting potentially – flattening at least. Surprisingly, I am seeing this in bonds, some robotics/AI- more on swing investing ideas later in the week.

Notice the lift here over the last few days.

Fed futures have priced in 3.5% as current but the Fed has actually only moved 25 basis points. Today’s chatter might push this futures rate above 3.5 but the yield curve is also shifting downward again away from inversion.

The TLT chart to watch – can we bounce and hold the floor?

TLT trying to hold the floor?
Yesterday’s sector performance

Summer book recommendation – The Fourth Turning if you haven’t already read it.

Here’s a quick link from David Rosenberg on the argument of where we head from here