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FOMC Day- 21Sep, 2022

Yesterday’s Recap

Tuesday, September 20th, 2022
Indices: Nasdaq 100 -0.85% 
Dow -1.01% | S&P 500 -1.13% | Russell 2000 -1.40%

Sectors: All 11 sectors closed lower. Consumer Staples led, but still fell -0.55%. Real Estate lagged, dropping -2.63%.

Commodities: Crude Oil futures dropped -1.66% to $83.94 per barrel. Gold futures fell -0.42% to $1,671 per ounce.

Currencies: The US Dollar Index rose +0.55%.

Crypto: Bitcoin dropped -3.38% to $18,878. Ethereum fell -3.82% to $1,323.

Interest Rates: The US 10-year Treasury yield rose to 3.567% – its highest level since 2011.

From @361Capital today – … in “one 24-hour window, there will be 16 central bank rate decisions (including the Brazil, Egypt, Indonesia, Japan, Norway, Philippines, South Africa, Switzerland, Taiwan, Turkey, UK, and U.S.)”

The last few Fed releases of 2022 have followed the pattern of buying the Fed news and selling the Fed minutes. The downturn is likely to continue, but we have been holding a bottom. We are going to trade both sides of this equation so watch for the our blog private notes to tell us where we are headed with this picture.

We could easily see a brain numbing rally if traders are caught on the wrong side with any kind of bounce since the market is VERY bearish with a great deal of negative sentiment and a lot of reversal readings. If you trade out of the box noted below, trade into known levels and take profit. In this type of formation, we are very likely to see price reversals and whipsaw.

An important look at the recovery of support yesterday – note also that flow shifts – but the recovery of the support line noted is what give the price action more traction. Pay attention to my noted levels recovering or failing to recover. Those lines will guide you immensely well.

The support line is critical to positioning price

What we do expect however is that whenever the rally does stop, we will head right back down into deeper levels below.

See that tight range? We can trade out of that on either side and simply follow the price action according to the slope of the tight sma

What bonds in our portfolios have done this year- the bond market has always been touted as the smartest group in the room – but we should add that – they are the smartest guys in the room AT THE END of the cycles. During this cycle, it has been abysmal.