Stocks-Everyone Is Working & Everyone Is Spending-SPX 4350 or Fed Stops It? Read It!

August `6 2022 Option Professor Opinions & Observations

We’re 6 weeks away from the next Fed decision but a couple of things are becoming more obvious. The “neutral” is way ABOVE the 2.25%-2.50% the Fed said it was and to curb this kind of price/wage spiral; the Fed has to go to near 4% and maybe far beyond as we said before PUTTING ON A TRADE (adding $5 Trillion to the balance sheet) is a lot easier than the UNWIND ($90 billion a month way too slow). This week we heard ISM services was supposed to be decline to 53 and came in about 57. This told us the JOBS number would be an UPSIDE surprise as if services demand is huge they will need more people. So rather than 250K jobs it came in at MORE than TWO TIMES at 528K and the prior month was revised UP!! No need to candy coat it…3.5% rate…wages YOY up OVER 5%…participation dropped…where’s the Slack??

Truth is the Q2 earn and revenues are LOWER than 1 year ago but hardly the fall out of bed once feared. Here in lies the key to the future. We’re at 2.28 on SPX this year which puts us at about 18.5 X P/E. Next year is expected 2.45 X 18.5 =SPX 4410. The BULLS cite that the 10 yr Treasury will stay at 2.70% (33 P/E) and therefore SPX 20X P/E is ok value and that the employment pictures underwrites the earning forecast. Here’s the rub…if the Fed wants 2% inflation the 10 yr Treasury will go way past 2.70% (now at about 2.85%) and as the savings are depleted and credit cards are maxed (EOY); the consumer spending abates. Should this occur; repricing occurs. The Fed has picked a GREAT time to play HARDBALL. The deficits are LOW and the JOBS are HIGH…we got a rally restoring asset values….so hit it hard NOW while it’s sunny !

Being the OPTION PROFESSOR; we’ve kept our eyes on the VIX which BROKEDOWN on the break UNDER 25 and has now approached 20. We believe a mover OVER 25 VIX and AAPL UNDER 160-155=a rollover. The BULLS say that it’s all priced in, everybody’s in cash, earnings hold up, retail is out…UP UP & AWAY!? The BEARS say the parents (FED) are coming home in 6 weeks; even if we see SPX 4200-4400..it won’t last!

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Stock Market-Fed Leaves Town-No Sellers-Big Question Now-How Long Does It Last? Read It!

July 30 2022 Option Professor Opinions & Observations

We told you 54% of the S&P was reporting this week and the Fed meets and GDP & PCE & ECI was coming out……so expecting smooth sailing was foolhardy….and WOW! did we get fireworks galore!

Our VIEW has been that SPX breaking ABOVE resistance at 3790-3850 set the stage for this HUGE rally COMBINED with the VIX breaking UNDER 24-22 which both occurred. We targeted SPX 4085-4150-4295 and 4400 as most likely points where the rally ends. –In fact; the VIX & AAPL may very well tell us when the coffee (FED) shows up at this drunks party. If we see the VIX (Volatility Index) sustaining ABOVE 25+ reading COMBINED with AAPL sustaining a price UNDER 159; the stampede we saw this week may fade.

There were TWO (2) MAJOR catalysts for this weeks rally & BOTH may be the fruit of MISCALCULATIONS.

  1. The Federal Reserve (Powell) announced a 75 basis point hike (2 in a row & most since Volker ‘s 1980’s). He followed up with a “pivot” in that the Fed will be meeting to meeting data dependent rather than aggressively raising rates and “at some point” they will pause. He said the Fed Funds rate is now at “Neutral” at 2.25%-2.50% which means it is NEITHER restrictive nor accommodative policy.

OUR VIEW- Powell made it CLEAR that INFLATION & the LABOR MARKET were TOO HIGH & TOO TIGHT. He said their MANDATE was to get INFLATION DOWN to 2% and that LABOR Rates must ease as they try to get “SLACK” in the economy by DEMAND DESTRUCTION. The median INCOME in the USA is 51K a year which means that those people and those BELOW the median are SQUEEZED by Gas-Food and Rents Ect. The Fed’s been TERRIBLE AT FORECASTING so they threw in the towel after their “TRANSITORY” debacle. Unfortunately; we feel their NEW TERRIBLE FORECAST is that 2.25%-2.50% on Fed Funds is NEUTRAL. The CPI (Consumer Price Index), ECI (Employment Cost Index), PCE Index (Personal Consumption Price Index) are ALL so far ABOVE 2.25%-2.5% that to call that number NEUTRAL is LAUGHABLE:) In Fact; the Fed’s favorite is PCE which rose 1% in June was 6.8% (up from prior month) is at a 40YEAR HIGH (1982)! The Fed Funds rate @ 2.25%-2.50% is ACCOMMODATIVE and the likelihood rates will go well ABOVE neutral is almost certainty. The Fed did NOT want to leave for 8 WEEKS with financial markets in a PANIC so they threw out the “at some point we will pause” line so investors getting wiped out in June have some hope & the long held belief by advisors that you should NEVER get out of your stocks would have plausibility. Of course; at some point they will pause….at some point the Knicks will win the NBA title…maybe sooner:)

2. EARNINGS are being touted as “surprising on the upside especially with AMZN & AAPL which is almost 20% of Nasdaq. OBVIOUSLY; at SPX 3600-3800, TOO MUCH WEAKNESS was discounted as consumers continue to spend (now using credit cards apparently). Stocks with high valuations (ROKU/ServiceNow) got clobbered. Margins were a problem for some (QCOM) and ad sales for others (SNAP META). As far as AMZN’s earnings operating cash flow DECREASED 40% for the trailing 12 months, free cash flow DECREASED for the trailing 12 months, while sales INCREASED which probably relates to HIKING prices. Finally; operating income DECREASED in Q2 vs, Q2 2021 and there was a NET LOSS was $2 Billion in Q2! AAPL’s revenue was UP 2% in Q2 COMPARED to 36% GROWTH in Q2 2021. Earnings per share (EPS) was DOWN 8% YOY, I-Phone & Services revenue was UP 3%/12% YOY but DOWN was revenue in other products, Mac, I-Pad. Growth is SLOWING at BOTH companies…they’re optimistic…does that make it so?

OUR VIEW is that last year 2021 was a banner year for cheap money, valuations, asset values and NOW we are faced with earnings and profits that are at best slowing which could be a prelude to declining IF the Fed is truthful to their MANDATE of inflation fighting and creating slack in the economy. If the Fed is NOT truthful…well we saw it this week…stocks will go thru the roof…commodities too…their dilemma is more like the 70’s stagflation where they never finished the antibiotic schedule and the illness returned.

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Stocks- Big Week Ahead-BUT What Happens After Q2 Earnings? Boom-Bust Aug. Must Read!

July 23 2022 Option Professor Observations & Opinions

We just came off a wild week where the SPX was up 2x more than where it closed on Friday. Earnings first told us that while misses on revenue & Margins could be overlooked for growth (TSLA) BUT missing on ad sales & guidance was unforgivable (SNAP). The news this week is kind of all over the place with the ECB hiking for the first time since 2011 (50 basis points) to a grain deal from Ukraine and Russia albeit thru that trustworthy country Turkey:):). Aggregate demand in the world has pushed past the breaking point so inflation is here to stay. The money supply has come to an abrupt has and the Fed run off the balance sheet is getting its boat legs. The S&P came out with a report that the Services sector contracted to 47 (slowdown) BUT so far XLY (consumer discretionary has been fairly stable) which means investors think it’s not as reliable as ISM numbers or all hell will break lose next week. Speaking of NEXT WEEK; we have big tech AAPL AMZN GOOGL MSFT META all coming out with earnings (and a HUGE number of more companies) BUT the big boys will shed light on how the Dollar, Enterprise Spending, and dodgy Ad Spending will affect multinational & ad supported tech businesses state their present & guide the future.

We told you our position was that BONDS topped in 2020, STOCKS topped in 2021 and COMMODITIES top may be in 2022 (Goldman Sachs Commodity Index DIVED from the 800’s to the 600’s-Looks Good! NEXT UP from the OPTION PROFESSOR….A TOP in the US Dollar that may start to develop-We’re On It!

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Stock Market-When Listening to “Experts” Be Smart-Always Consider the Source! Must Read!

July16 2022 Option Professor Observations & Opinions

Sometimes we wonder if we are on the same planet as some of the “experts”. Most people you hear from are LONG stocks and LOST a very large amount of money at best on paper. The Fed has made it about as clear as a bell that they want INFLATION at 2% and last report has CPI at 9%+ and the PPI at 11%+! Unemployment is still at a mid 3% level. How’s that going to happen if stocks are going to roar back to their highs (wealth effect) & the Fed is DONE in September & will start to pivot.. Where’s the EVIDENCE? We are more than willing to get BULLISH but SPX 4000-4200-4400 are formidable opponents for now.

Every Report that comes out is cherry picked to put it in the best possible light (CPI PPI Retail Sales ect). We see the Core still way up in the inflation numbers and if you back out Gasoline prices & Food and adjust for inflation…retail sales are suspect. With the inversion in the yield curve; we’ve seen companies RAISE prices as to front run the slowdown and get the money from consumers BEFORE savings and credit dries up (did you see reserves for losses at the banks?). This consumer sentiment and future inflationary expectations (U of M) is at best stable at low levels and who made this survey the end all and be all. Our view has been that SPX either has bottomed at 3600 (soft landing) or 2800-3200 (hard landing). Everyone who is on TV or writes pricey newsletters or main street brokerage firms won’t be saying we were dead wrong, shoulda sold in Jan, and 20%+ to go! BEST DEAL was simple rolling short term T-bills-Tril$$ Saved!

Old adage; if you don’t get the joke…it’s probably on you. Who knows if the market is going to SPX 4800 or 2800? We do know that many moving averages (intermediate/long term are pointing DOWN and we are very far from the Fed’s inflation mandate. If you were ever going to front load hikes….now’s the time with jobs still plentiful, household & Corp balance sheets green,& a consumer that hasn’t screamed uncle! Things take time and to unwind 12 years of printing money and a balance sheet 2X pre covid..Patience! If a stock goes from 10 to 2 and then jumps to 3; you could say it’s up 50% but for most that is misleading.

RIGHT NOW! SPX needs to stay ABOVE 3720 & NO CLOSES UNDER 3740 BEST CASE RALLY 4100-4350. The QQQ needs to Get ABOVE 293 with BEST CASE RALLY 335-350. IWM ABOVE 182 BEST CASE 200-205. The Reality is the longer the markets stay UNDER the BEST CASE targets… the more likely we see a BREAK! With the Central Banks having printed so much money; it feels you need Marco Polo for price discovery:):)

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Remember All investing involves risk of loss and it is not right for everyone. Past Performance is not indicative of future results. Information & opinions are for informational purposes only. It is NOT advice.

Stock Market-Questions? The Lows In? Fade It?Earnings Start Next Week? Our Views-Must Read!

July 9 2022 Option Professor Observations & Opinions

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This Week the stock market had some gains with SPX up1.94%, the Nasdaq up 4.6% and its best run in quite awhile. We got the Jobs Report but there seems to be an almost desperate need to try to read bad things into where there is none. For instance: earnings were down a shade and many suggested this was the big turn….for heavens sake we still have 11+ MILION Job Openings!! The Fed is DEFINITELY going 75 basis points in a few weeks and the CPI next week should still be elevated with whispers of a 9 handle! The Fed is still WAY behind the market rates as the 2 yr Treasury went UP 27 basis points this week! The recession may be delayed BUT if everyone’s earning and revolving credit is accelerating (low & middle incomes)….How can the Fed get inflation to their targets. They want DEMAND to decline and truth be known they probably wants stocks & shelter to drop as well as in the 1980’s the Debt to GDP ratio was 30% and now it is way OVER 100! Substantially higher rates would drive debt servicing to crippling levels! They need help with Gasoline (only 3.9% of CPI), Food, and the Index of Inflation Expectations ( comes out quarterly out this Friday) to break to the downside. With the sad news of Abe’s assassination in Japan; some compare the run up we saw here in the USA (SPX 4800) to Japan’s run in 1990 where it was we saw it followed by slow growth (30 years to get back near the highs)…debt explodes & Govt prints/buys own debt with explosion in money supply..let’s hope not! We never saw more premature talk of a Fed pivot…this is NOT 2008 or 2020..we got huge inflation and everyone’s got a job with 11 million more to spare…the Fed is hiking until sustained evidence of lower inflation and lower consumer demand…period!

EARNINGS kick off next week wit JPM, C, WFC, UNH DAL, PEP getting us started. We will see if revenues are up due to interest revenue (banks) and higher pass throughs (UNH DAL) and we will see if margins have been pinched by higher costs and if any guidance is given. The health care sector did see 3 stocks hit new highs in Cigna, Humana and LLY. Q2 expected to see 4.1% average earnings growth rate and 10.1% average sales growth (and the Fed is going to pivot soon??). Q3 expected 10.5% earning growth and Q4 9.7% earnings growth so full year anticipated at 10.2% earnings growth…if true…Fed Hikes++++

The first half of the year was the WORST for stocks in 50+ years! we got Inflation, War, Treasury Yields Spike, Economic Slowdown. Will there be a light at the end of the tunnel and a 2nd half BULL RUN? We are seeing some signs of slowdown (Grains, Oil- Nat Gas, Lumber Industrial Metals all big sell offs) housing & rents stabilizing or fading a little bit AND history tells us AFTER a 15%+drop in a Quarter SPX has been UP 6.2% in the next quarter, UP 15.5% in the next 6 months, and UP 26% in the next year! These are Lovely Statistics based on past performance which is NOT indicative of future results. We will monitor prices and follow them where they lead. We TOLD READERS in our ALERTS that SPX had to stay ABOVE 3720-3740 ( our RISING long term averages) which it did BUT we need CLOSES ABOVE SPX 3925-3995 to keep it going. Our 12 SMA is pointing DOWN at SPX 4344 other resistance is at 4000-4200-4400 areas. The FED could pivot IF STRONG EVIDENCE slowing consumption, investment demand, labor turnover, vacancies and other factors ACROSS THE BOARD but for now no change in Fed plans a RATES are too low, inflation risk is persistent, and a soft landing still seems to be a long shot. Soft Landing? Very Complicated

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Stocks-Winning Week on Wall Street- How Much Further Can We Go & How For Long? Must Read!

June 25 2020 Option Professor Opinions & Observations

We sent 2 QUICK ALERTS out this week…the first said we needed to close above SPX 3711 (LT Chart 36 SMA) AND we needed to clear SPX 3815 (A Spike Was On!) both were sage insight into market moves. For anyone who has been LISTENING…we told readers that BONDS PEAKED in 2020 and STOCKS PEAKED in 2021 and this year we expected COMMODITIES PEAK in 2022…so everyone who plowed with the grains, fertilizers & energy have been whacked. Use your common sense; that far away from averages=reversion!

This week we got a substantial move on yields (they dropped 13%)….we got a substantial drop in many commodities (some grains back to pre Covid!) & Consumer Confidence dialed back inflation expectations. If you’re oversold (SPX at 3600); this is the tonic you’ve been waiting for and the biggest movers were tech and high valued growth/innovators(the most beaten down). The opinion now is the Fed will hike .75% in July & .50% in Sept and assess….they will see the numbers rolling over and become less hawkish. Of course all the promoters of this theory are talking heads that are long and need to tell clients they are not idiots who should’ve told them to go to cash & roll shorter term T-Bills in January but failed to do so!

The data calendar is kind of light for a few weeks and we have a long holiday which sometimes sees rallies (Memorial Day) but rest assured CPI & PPI & Earnings are coming and many are hopeful that the inflation numbers will improve & sales, margins & costs risks to earnings will be avoided-upside surprise? The BANKS come out first and we will see if Net Interest Income could jump 15%-20% this year, if the losses they carry on mortgages that lost value (rates rose-bonds drop), if the loss of refi’s is being offset by commercial loans & credit card usage-BIG RISK..have we overcompensated the risk of recession losses

Being the Option Professor; we would be remiss to not mention the VIX which in the last 2 weeks had a double top at 35 and went home near 27. The bulls say we will trade 20-25 on the VIX during the 2nd half of 2022 and the market will prance back toward all time highs. The bears say that by the end of July; the VIX will be spiking and don’t take the idea of a 40 handle off the board. Realistically; we must ask if the inflation numbers will fall out of bed (gas, food, rents ect) and will rising equities fit into anything akin to UNCONDITIONAL commitment to turn 10% inflation into 2%? DEMAND DESTRUCTION is no duck walk!

We do have a number of tailwinds currently like End of Quarter/Month Window Dressing (can’t tell clients you’re all cash)….Q2 Earnings.. some Buy Backs… some Insider Buying…Russell reshuffle…& short covering CAVEAT EMPTOR-Our Work show SUBSTANTIAL RESISTANCE basis SPX at 4100-4250 and 4450..respect it!

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Stocks-Do We Get A 8%-10% Rally Off Lows Into July 4th or Do We Accelerate Into Abyss? Read It!

June 18 2022 Option Professor Opinions & Observations

We sent out 2 QUICK ALERTS this week on Tuesday & Thursday….the first brought to your attention the bigger than expected hike by the Fed of .75% and the fact that they had a lot more hike to get to their target of 2.5% to 3% in the next 3 meetings. We told readers that a combination of hot PPI numbers and the Fed trying to get in line with market rates (we even threw in the full moon) and said VOLATILITY was going tp spike. Equity risk premium is too low and so were put/call ratios were too low. We got the Fed message and then we sent out the Thursday alert outlining how the Fed has been all over the road with forecasts and expectations and the Fed was chasing inflation like the horses chasing Secretariat in ’73:):)! This rosy forecast on inflation and unemployment is just silly as to get to the Fed target of 2% inflation without unemployment rising is aspirational at best. We have a strong dollar which hurts most big firms that get 50% or more of their revenues overseas. We have Food & Energy price that backed off this week but a blip is not a trend. Central Banks tightening into DEBT TO GDP +300 AND contracting economies. Credit Spreads are starting to blow out to 500 BPS while Ron Baron says we are at generational bargains.

The VIX hit 35 which when that happened in Jan, Feb-March, April-May lead to nice bear market rallies. There was a feel of panic selling volume this week and put/call ratios did get elevated. There are gaps above the market that could get filled. Stocks like MSFT AAPL GOOGL AMZN fared better than many. The Big IF… Bond Yields & Oil PEAKED this week…pre-holiday, pre-Q3 earnings, EOM Q2 Window dressing plus the Russell realignment and maybe some corporate buys could aid a rally toward SPX 3900-4150. Our long term charts have a rising moving average at SPX 3711….if you’re bullish…above that level good.

The Fed is committed to get inflation down and they have been dealt a bad hand (oil-food-war). On Friday; interest rate sensitive markets (ARKK Travel Cyber Cloud China Solar) moved up.. but next week??

At the end of the day….we’re UNDER most important Moving Averages and most are pointing down. Yes….we are oversold by some measures but the risk of huge UP or DOWN moves are as great as ever!!

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Stocks-The Option Professor Warned You & Encouraged HEDGING for a Year! Read More!

June 11 2022 Option Professor Observations & Opinions

The stock market got whacked in the last 2 days for about 5% of it’s values. The CPI came in hot and prices are rising on just about everything. On Wednesday we wrote a QUICK ALERT to our readers that a turnaround Thursday & Blackish Friday may be in the cards (especially if we remained UNDER SPX 4180!). This idea of a Fed pause (the balance sheet and Fed rates haven’t even budged) we said was aspirational. As far as inflation peaking and a swift decent; that also was concocted by people who desperately need a rally not those who realize….inflation is persistent and the economy/earnings will be slowing/P/E’s tighter. We are humble around here but we are from the Show Me State (Mo.)…break above SPX 4180 & we’ll see. The idea is you can’t get to Boston from NYC without going thru Connecticut…so let’s catch the bus there. The last time we had headline inflation (8.6%) and Core inflation (6%) at this differential (2.6%) was in the 1970’s into 1980 and we had a thing called Stag-Flation-stubborn prices/fading growth-sounds like NOW!

We have been barking about the P/E ratios for a couple of years and rather than the boy who cried wolf-all you needed was to be a little patient AFTER the Fed did a pivot in Nov 2021…then HEDGE or GET OUT! Where’s the bottom? What a silly question…nobody knows….but we do know the trend is down and we know inflation is persistent and we know inventories are rising & hiring is slowing and margins are tighter. We know P/E ratios overshoot to 14X-16X and earnings are 2.35 on SPX this year and 2023 needs a shave. Why is the Fed so slow on hiking (balance sheet hasn’t budged & Fed funs is 3/4%!)? Our view is they are PETRIFIED the asset bubbles they created ( stocks-bonds-real estate) would COLLAPSE with normal rates! We actually agree with them. The STOCKS & BONDS are off to their worst start in decades w/ 3/4 Fed rate

We told reader BEFORE the drop in stocks & bonds that this was the year of the Will Rogers theory which is you should be interested on the return of your money not the return on your money. We Can Help!

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Stock Market-In the Next 4 Weeks-We Will See Push Come to Shove-Are You Ready! Must Read!

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June 4 2022 Option Professor Opinions & Observations

The stock market has been like Milford Sound New Zealand where they say if it’s not raining…it will be:):) After the pre holiday panic; this week we lost some ground….last week we made ground—-WHAT NOW?

PUSH WILL COME TO SHOVE is a possibility as we have nothing but variables ahead-HEAR BOTH SIDES!

The BULL side is that the markets have DISCOUNTED much of the Fed action and VALUATION repricing. The Jobs Report we got will be viewed as the last great one (postings are slower). Inflation will ROLLOVER due to a build in inventories (discounting) and once consumers see discounts on cars, furniture, durable goods, and housing…inflation will back like the lead horses in this years Kentucky Derby:). Labor will ease as more come back and a freeze on hiring and projects occur. A couple of helpful things like a drop in oil and resolution in the War (13 weeks old) wouldn’t hurt either. China coming back online (Starbucks just reopened stores). Positioning is near record lows & bearish sentiment is great & recession fears unfound. Corporate buybacks expected to be $1.2 trillion annualized and rebalancing of stock indexes and ETF portfolios plus EOQ window dressing. The Fed will see fruits of tightening & pivot/pause after Labor Day. WOW…that’s quite a story to compete with…it’s the story of those long stocks & SPX EOY goal 4800-5100.

A pancake always has 2 sides….let’s check out the BEAR side and see what they have to say. Let’s start with INFLATION that’s 8%+ (really…rents-food-gas-car prices-housing-travel & leisure ect up 8%..where?). There is so much demand acceleration (JOBS at best level 50 yrs-INFLATION highest in 40yrs and the LARGEST Fed Balance Sheet EVER by about $4 trillion bucks!). Do you think the Fed can get the inflation rate down WITHOUT the unemployment rate jumping, shrinking the balance sheet (remove liquidity), slowing GDP? There is a structural shortage of oil (despite add by OPEC) and food as well—inflationary! The VALUATION argument is as follows…..higher interest rates/lower valuations…so at 2.30 earnings on SPX at 18X = 4140 (we’re here!)….at 16X = 3680…at 14X = 3220…do get the idea??…What if earnings get CUT and valuations CONTRACT?? What if China’s reopen & the War break badly? Credit Card usage indicates maybe consumers have gone thru their cash and maybe sentiment bearish but have they sold?

There you go 10 lines for each view (whatya expect I’m a Libra:)….so how do you make sense of all this??? OUR VIEW- The MAY LOWS in QQQ (Tech) was 280….must hold 290…..IWM (small caps) LOW was 170 must hold 182….SPX LOW was 3800…must hold 3720…BEST CASE we get that & close ABOVE May’s highs and we continue higher albeit choppy toward resistance at SPX 4450 then 4631 then 4800…..HAPPY DAYS! WORST CASE…the unwinding of the balance sheet and getting DEMAND DESTRUCTION is painful which leads us to a break of SPX 3800 & interest rates spiking & EARNINGS revisions & VALUATION contraction.

We spoke in JANUARY 2022 of these BEST & WORST scenarios.. things change in life–the bulls hope so:)

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Stock Market-Why Such A Big Rally? Positioning & Liquidity…Trust It & What’s Ahead? Read This!

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May 28 2022 Option Professor Opinions & Observations

We just got the biggest rally this week in a long long time. We told readers that when the 10 yr Treasury backed off its extreme overbought condition at 3.20%…we got the green light for the pre holiday rally. If you use your common sense; you can see that the extreme rally followed 8 weeks of extreme selling. With the high volume selling that occurred when the 10 yr Treasury yield was making new highs and the SPX was making new lows; anyone who has been around the block knew that if rates ease; a rally ensues.

It is amusing to us (decades of knowledge & experience) to hear that these companies are now great, the Fed is going to pivot/pause (they haven’t even hiked yet:):), and inflation has peaked and we’re roaring. Do you know what’s happening in the month of June??? The Fed is hiking interest rates and doing QUANTATIVE TIGHTENING and the CPI is coming out. One of the Fed guys (Bostic who DOES NOT even VOTE) says he thinks we should pause in September….What does he know and what authority…NOTHING!

Powell has made it clear that they want INFLATION to go down toward 2% from 8%-15% where it is now. Do you think the stock market going to new highs, household saving declining back to 2008 levels (spending) and credit card usage-availability & exploding retail sales off the charts helps the Fed’s goals?

Short covering, high frequency trading, and spec buying, end of month window dressing (are you going to tell your boss you are in cash as the SPX rallies 350 POINTS!!) has its limits will take us only so far up. The SPX has technical resistance at 4177 and then 4270 and 4396 and 4450 so the hurdles are waiting. As we saw when we got that suckers rally to SPX 4631…the market can break thru resistance sometimes but if it is a FUGAZZI RALLY..down it comes..if not..is the Fed is for real (who knows?)…their mandate is cooked

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