Dear Reader,
After a few weeks, we finally had a positive turn in the S&P 500. But the market is taking profits today as we start to assess the state of the economy. I'm long a few positions for the moment, but this will be a very challenging next few days.
Mike Burry knows what I'm talking about.
Let's dive into the moves of the market on Thursday. (click here to receive Garrett's premarket flashpoint report)
Keeping It Short
We're back at a three-week high, and it doesn't really feel all that positive. The S&P 500 and the Nasdaq both pushed higher, but the Russell 2000 is lagging a bit. We are still in a low-volume environment - with the SPY volume at 72% of traditional volume.
The market is largely preparing for tomorrow's PCE Inflation number. I think that the market is largely expecting this number to be elevated. But I get the sense that the figure doesn't matter. A lower number will likely signal the end of rate hikes for the year.
A figure that beats expectations will largely be ignored on the back of expectations that the May meeting will produce the last rate hike of the year. Meanwhile, the focus is largely centered right now on the banking system and the efforts to contain a credit crisis.
Right now, I'm following the signal. I know that can be difficult... even as the market pulls back during a day-trading session. (get your hyperturn list ready)
Today's Momentum Reading
WORLD'S BIGGEST INDICATORS
Broad Market: Red
S&P 500: Yellow
Recap: The World's Biggest Indicator (Momentum) is Yellow...
We're positive on the S&P 500, but the market has seen a bit of profit taking today. I'm looking for a broader rebound in the final hours today.
Flashpoints I'm Watching
- Et Tu France? The shift away from the dollar reserve system continues to accelerate. A report shows that France has purchased 65,000 tons of Liquified Natural Gas (LNG) from China in the first-ever Yuan-denominated trade. This trend has been accelerating as more nations - including Brazil - have been using local currencies to transact for commodities. An acceleration in this trend would create a reduction in demand for dollars worldwide and potentially fuel a much weaker U.S. dollar.
- Wrong to Sell: Famed hedge fund manager Michael Burry admitted that he was wrong to sell. And that's an important lesson on why it's important to trade momentum. But could this be a rather Contrarian indicator? Momentum had turned positive, Burry Tweeted and the market started to reverse. We'll see. For right now, the S&P 500 is looking stronger and will look to hold above 4,000 resistance.
- The Layoffs Continue: The U.S. is getting closer to recession, according to an uptick in junk bond spreads. People are turning away from bad debt and searching for quality in this market. Still, layoffs continue to accelerate. The latest company to cut its payroll is Roku (ROKU), which slashed 200 positions. Shares have been on the move higher on the news. In addition, the company decided to terminate a handful of lease agreements, a possible trend for the months ahead for other industries. How is WeWork (WE) still a public company?
Long Shot Trade
Buy to Open the Robinhood (HOOD) April 6, 2023 $9.50 call for under $0.20. Remember, this is a low-probability trade, so please be conservative and manage the trade appropriately. (learn higher probability of success trading with me in flashpoint trader)
What You Missed
Let me tell you a story about Western Digital Corp. (Nasdaq:WDC).
This story has nothing to do with how the tech stock shot up 5% yesterday.
It's about how this scientifically-constructed technology found a 139% winning trade on this stock - with a minimum investment of 70 bucks.
WDC was trading around $38.50 on February 28... and this trading tech identified a high-probability trade opportunity.
Tom Gentile bought a single trade for 70 bucks.
19 days later, it had dropped to $35.
And he sold that $70 trade for a total profit of 139%.
And he owes it all to the revolutionary technology called Quantum Scripts.
For most traders, 139% is a wild and extraordinary win. But in the past 11 months of trading Quantum Scripts, it's not even in the top five:
- 176% in 3 days on MRVL
- 211% in 8 days on VLO
- 219% in 16 days on OLED
- 240% in 20 days on MRO
- 338% in 9 days on ROST
Tom has yet to find a technology that can compete with the kind of gains Quantum Scripts has produced.
And he wants YOU to put it to test - right here.
Stay Liquid,
Garrett
The post A Swing Positive on S&P 500 Presents Us with a Trade appeared first on Midday Momentum.
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.