Hi all,

We finally found out the Fed decision and it was a 0.50% rate cut as was predicted by the CME Fed watch tool. The reaction to the cut and subsequent comments by Chair Powell led to a fair amount of volatility as expected with the market jumping up but ultimately selling off into the end of the trading day.

However, the Wednesday night/Thursday morning futures rallied hard resulting in the markets gapping up higher. It could have been a lot of traders getting short after the decision and then getting squeezed out of their positions in a short covering rally Thursday.

Friday was a triple witching day where quarterly, monthly, and weekly options and futures expire resulting in some choppy price action as large investors and traders move share prices around to improve their returns.

With the interest rate decision behind us, we may get some consolidation and even a pull-back albeit not severe. Watch for Friday morning when PCE price index data is released – the Feds favored inflation gauge.

Recap Video

Watch the Recap on YouTube

Sectors in Play Last Week

• Energy and Financials were big gainers this week.
• Real Estate and Staples were the sectors that lost the most for the week.

Key Levels for this Week

• DOW (43,062) – support 40,800 and resistance 44,000
• QQQ (482) – support 470 and resistance 494
• SPY (568) – support 560 and resistance 570
• IWM (222) – support 215 and resistance 225

What to Watch for this Week

• Monday – 9:45 S&P Manufacturing and Services PMI
• Tuesday – 9:00 Home Price Index; 10:00 Consumer Confidence  
• Wednesday – 10:00 New Home Sales
• Thursday –8:30 Jobless claims, Durable Goods and GDP; 10:00 Pending Home Sales
• Friday – 8:30 PCE price index data; 10:00 Consumer Confidence

Earnings this week

• Tues – KBH post
• Wed – CTAS pre and MU, JEF post
• Thurs – ACN pre and COST post

Positions and Trades Last Week

• TIL – Sold for a loss.
• AMRK – Long from the previous week’s watch. Sold back at break-even.
• CMG – Long. Looking for a break higher
• PLTR – long – continuing to hold.
• SPXL – From last weeks watch list. Was expecting a bounce back and we got it. Sold on Thursday.

Tracking for Potential Trades

Staying light on swing trades this week – not sure which way the market is going now.

• CRWD – holding some $300 calls expiring next week.
• ORCL - $175 established high. Likely has good support around $160 and maybe range bound between these levels.
• NFLX – Continues to look strong. Break out higher +$700 
• UVXY – A possible trader for increase in volatility if it happens.

 

Note: These are investments I am in or watching however, they may not be suitable for all investors. The author of this email is NOT an investment advisory service, a registered investment advisor, or a broker-dealer and I do NOT undertake to advise clients or recipients of this email on which securities they should buy or sell for themselves. This email is provided for information purposes only and traders should always consult with their licensed financial and tax advisors to determine the suitability of any investment.