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Thursday, December 1, 2022

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Fed Up Thursday – More of the Same

SPY 5 MINUTEReally people?  Really?  

How many times can you read the Fed Minutes and FREAK OUT?  And then jump for joy?  And then freak out again?  Really???  Don't you look at this chart and wonder what kind of idiots your fellow invesors are?  

It's scary out there, that's for sure.  StJeanLuc pointed out in Member Chat last night that 29% of Louisiana Republicans still blame Obama for the Federal Government's botched response to Hurricane Katrina.  Another 44% aren't sure whether it was Obama or Bush (the guy who was actually President at the time).

That leaves just 27% of Republicans in the great state of Louisiana who, given the clear choice of two people who could be at fault (otherwise many would have chosen Carter), were able to correctly name the person who was actually in charge.

INDU WEEKLYThese are the people (well, the top 10% of them) that you are trading with!  They're not just irrational, they actually BELIEVE things that simply are not true.  It doesn't matter what Paul Krugman says or how well he says it – 73% of those people won't believe it anyway.

As I said in the morning regarding the sell-off ahead of the Fed Minutes at 2pm: "This can be quickly reversed by the Fed or, more accurately, by Hilsenrath's interpretation of the Fed Minutes in the WSJ, minutes after they are released."

We had that little rally from 2:00 to 2:50 (see Dave Fry charts) but, at 2:50 I warned our Members that it was "All Hilsenrath on this rally," referring to the WSJ's Jonn Hilsenrath's doveish spin on the Fed Minutes.  Rather than let him force us out of our short positions, we covered with FXI And EWJ longs but we quickly took losses on those and got bearish again, once the "rally" subsided.  By 2:59 I was already warning our Members:  

No real volume to this move – now 59M on the Dow at 3.   That means this whole "rally" could reverse really quickly into the close – as did yesterday.  

At 3:02, watching the Dow I noted: "Rejected at 15,000 – I regret the longs on FXI and EWJ already!"  As I said, we took the bullish covers so we wouldn't have to change our short positions.  The idea was to ride out a silly rally based on a very doveish spin on what GS more accurately summarized as: "generally consistent with our view that tapering of asset purchases is likely to occur at the September meeting."

I know, it makes your head spin.  Don't blame me – I already said in July that August would be a good month to cash out and take a month vacation – I have to be here, it's my job – what's your excuse?  

Since we do have to be here, we went short, as down is more likely than up at this point.  But down doesn't mean straight down every day.  Looking at the Big Chart, there's plenty of damage being done – despite the low-volume "stick saves" that come on a regular basis either pre-market or intraday.  

Looking at the spreadsheet on our Big Chart – do you think the Nasdaq is going to lift the Dow and the NYSE over the "Must Hold" line or do you think the Dow and the NYSE will drag the Nasdaq down 300 points to test its own line?  I already gave you an SQQQ (ultra-short Nasdaq) play the other day – so you know where I stand.  This morning I said to our Members:  

The Dow is close enough to 14,800 that we'll call that the drop from 15,600 which is 800 (5%) so the weak bounce (assuming they are on a pattern to fall to 14,800) is 14,960 and a strong bounce is 15,140.  So, the bearish premise would dictate that the Dow has trouble getting over 14,960 – even though it hasn't completed the drop yet.  

Original_15342129We'll see how the Dow handles 14,960 this morning but it's the S&P that usually gives us a proper indication and there we're now looking for a 14-point weak bounce off the 1,640 low and, if they get back over 1,654, then 1,668 is the next hurdle and anything less than that by tomorrow's close will keep us bearish into the weekend.  

Not that we're not finding any bullish plays.  In fact, we even flipped bullish on Oil Futures (/CL) at $103.50 (until 10:30, when we get the Nat gas report) and we shorted again at $105 and $104.50 for a lot of nice, little gains already this morning.  It's a tight range but fun to play for quick, little gains this early in the new contract session (very tight stops, of course). 

This week we aready went long in Member Chat on RIG, NLY and DIS for long-term longs – so it's not like we can't find ANYTHING we like – just that it's slim pickings and we prefer to be cautious at this market inflection point.  If the news-flow changes (and it hasn't as of our morning review), we'll be thrilled to get more bullish but, at the moment – I'm sorry to have to keep being negative.

On the bright side – you still have two weeks left in August to take that vacation!  

 

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Expedia to power Travelocity's sites, shares +0.9% AH • 9:48 PM

Expedia (EXPE) has reached a long-termr deal with Travelocity (owned by private travel giant Sabre Holdings) to "power the technology platforms" for Travelocity's U.S. and Canadian sites, as well as to provide its travel inventory and handle customer services. The deal is expected to go live in 2014.

In an 8-K, Expedia discloses Travelocity will be paid affiliate marketing fees for Expedia bookings made through its sites, and that Expedia could have the right to buy certain Travelocity assets down the line.

Sabre asserts Travelocity is the #2 online travel agency in the U.S., and the #6 U.S. travel agency overall.

"It’s a virtual merger," says travel analyst Henry Hartveldt. "It’s as if Costco said it would source everything from Walmart and use Walmart’s ordering system and inventory management system and everything else."

The deal stands to give Expedia more scale as it continues battling with archrival Priceline (PCLN) in a very competitive North American travel bookings market.

pstas – please tell me who wrote that so I know who to avoid reading, thanks!

COMCAST having some system related email problems. No service in the chicago market; also told that Michigan and Florida affected- may be more widespread. 

"I think they should literally put a monkey in charge to test my theory that a chimp could do a better job at running the company than Steve Ballmer."  Thanks, Phil, I need a laugh after having to roll my TSLA puts up to Sept.21 180s!!

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