Hi all,

This week the CPI and PPI data showed inflation is still a concern with those numbers coming in higher than expected on a month over month basis. Some Fed officials mentioned that they still feel more aggressive hikes are needed to cool the continued rise in prices with the labor market remaining very strong.

The DOW and the SPY indexes finished down just slightly on the week while the riskier indexes the QQQ and particularly the IWM managed to put in reasonable gains at 0.5 and 1.5% respectively.

Interest rates on the 2- and 10-year treasuries headed higher again on Friday as the bond market is continuing to price in more rate hikes by the Fed. The levels pulled back after hitting prior highs at resistance but watch for these levels to break out with US dollar continued strength as well.

Next week we get the PCE price index data which is a favorite inflation indicator for the Fed. That may well also come in higher than expected which may pressure the Fed to get more aggressive on rate hikes.

Volatility remains low but the options market watchers saw some traders placing some very big bets that volatility will increase significantly by summer. Higher volatility will mean a market sell off has occurred.

In summary, we are chopping in a trading range now. I am raising cash and waiting to see which way we go from here.

 

Key levels:

 

• DOW (33,826 now) – support level 33,500 and resistance is at 34,300
• QQQ (301) – support level 295 and resistance is at 310
• SPY (407) – support level 400 and resistance is at 420
• IWM (193) – support level 185 and resistance is at 200

 

Recap Video:

 

Watch the recap on YouTube

 

Positions:

 

• WLLW on Toronto Stock Exchange (TSX) - long term hold. ($0.85)
• FOM on TSX - this is a small cap mining company. I like the drill results they are getting and management team is solid. Highly speculative at $3.00.
• FLEX - Long, but will take profits next week.
• ATVI - Sold.
• TSLA – Short $60 put options March expiry./li>
• DUST – Long on strengthening dollar
• UNG – Sold position – more weakness, no bottom in sight.

 

What to Watch for this Week:

 

• Tuesday 9:45AM – PMI data
• Wednesday 2:00PM – FOMC Minutes release
• Thursday 8:30AM – Jobless claims
• Friday 8:30AM – PCE Price Index

View the Economic Calendar on Trading Terminal

 

Sectors in Play Last Week:

 

• Consumer Discretionary and Defensive sectors were the strongest for the week.
• Energy was the largest losing sector by far (strongest last week).

 

Earnings this week:

 

• Monday - Holiday
• Tuesday - HD, WMT, PANW, COIN
• Wednesday - BIDU, TJX, PBR, RIO, NVDA, TDOC, EBAY, ETSY, LCID
• Thursday - BABA, MRNA, DPZ, LNG, SQ, BYND, CVNA, INTU
• Friday - EOG

View the Earnings Calendar on Trading Terminal

 

Tracking:

 

• $TNX – Watch 10 year treasury for direction of rates.
• DE – Looking to sell $440 calls at resistance after earnings report.
• FLEX - Stalling at $25 – will sell next week.
• DUST - Still long ETF to short gold miners on US$ strength.
• LAC - Pullback to $23 would fill the gap and possible long again.
• META – Huge gap to fill down to $155 – more downside likely.
• TSLA – Trading in a range but could have more upside as retail traders push it higher.
• QQQ – Could have more downside to 190.