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Thursday, March 28, 2024

Monday Market Movement – Live from Las Vegas

SPY 5 MINUTEGood morning!

It's day two of our Philstockworld Las Vegas Seminar and we had a great session yesterday.  It's 4am and I'm scheduled to start today's session at 6 so I'll keep this short and sweet.  I already put up a note to our Members this morning to watch our shorting lines on the Futures and there's no mystery to  WHY we are shorting after Friday's $5.2Bn POMO pump-fest.  

 This entire week, there will be just $7Bn of POMO so NOW we'll see how real this bounce-back is.   Oil (/CL)doesn't seem to think the rally is real as it languishes at $94.25 and gasoline (/RB) is barely holding $2.55 and gold isn't buying the easy money story either, after collapsing from $1,310 to $1,285 on Friday's jobs report.  As Dave Fry notes:

Just when you thought a correction was at hand the news wires picked up some strange spin. Investors glommed on to some strange items. First 205K new jobs were created which seems good. How does one interpret “good” is the challenge currently. The unemployment rate inched higher to 7.3%. Nobody cared about that so the focus quickly returned to table-pounding bullish pundits who focused on how bullish the job gains were. But were they really? Let’s see. Most of the jobs are part time. Full time jobs fell by 623K. (Hmm, this doesn’t sound good.) Worse still the labor participation rate increased to 96.6 from 96.2. That doesn’t seem like a lot but it is—930K people.

Later, Consumer Confidence dropped to 72 vs 75 exp & prior 73.2.

11-8-2013 5-37-34 PM weekly flows

Now why would any of this be good news?

 

The quick, sharp reversal on the daily chart looked fake, Fake, FAKE as the Dow, the S&P and the Russell all came back to Thurdays's highs, almost to the penny.  I'm SURE it was just a huge coincidence that the independend actions of millions of investors buying and selling thousands of individual securities just so happened to cause a confluence of ending prices of 30 Dow components, 500 S&P Companies and 2,000 Russell small caps ALL to end up at the EXACT same high they hit the day before.  Yeah, that's the story

As you can see from our Big Chart, the Russell is right on its 10% line at 1,100 so it's a great shorting spot for us as it provides a very obvious place to stop out of the trade.  That, as we discussed in our Futures Trading Workshop in yesterday's session, is the key to controlling losses in Futures trading – having a good, close exit ready BEFORE you enter the trade.  

UUP WEEKLYWe're shorting the Russell Futures (/ES) below the 1,100 line (and at 1,110, if they get it back) and it's confirmed by the Dow below 15,750 (/YM) and S&P (/ES) 1,770.  The Dollar is drifting at 81.22 and, as you can see from Dave Fry's Dollar chart, 82.25 may just be the pause that refreshes, as it translates to the 22 week moving average at $22 on UUP.  And look at the MACD and RSI – those are both poised for breakouts too.  

You don't need a seminar from me to know what's going to happen if the Dollar takes off again.  Where were the markets in late June, when UUP was up at 23 – less than 5% over where it is now?  We were crashing to 1,560 on the S&P – that's where we were!  

We get the US Monthly Budget Statement on Wednesday, at 2pm and we'll see what effect the shut-down had on our spending.  We'll also see the Chicago Fed tomorrow along with Small Business Optimism but it's a light data week that's heavy on Fed speak as we hear from Fisher  (super-hawk) tomorrow morning, Kocherlakota (hawk) and Lockhart (hawk) tomorrow afternoon (1pm), Big Ben (dove in chief) on Weds night (7pm) and Plosser (super hawk) at 9am Thursday followed by what is now the biggest market mover of the week – Janet Yellen's (dove in line) Senate Confirmation hearing – where the GOP will use their time to talk about just how horrible the economy really is and how dangerous Fed policies are.  Still want to be bullish?  

A rising Dollar (or gravity) can kill the markets up here and it's a low POMO week and we have November options expiring on Friday and I already put up 3 very good hedges that can make 500% if the market falls in last week's posts and a couple more in Member Chat so PLEASE – do not come crying to me if we have another day like Thursday and you are not positioned for it!  

 

IN PROGRESS

 

 

 

 

 

 

 

 

 

 

 

 

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