Yo Pit Crazies,
Option Pit specializes in finding trade ideas that help students maximize current market conditions.
What we now have is a market going nowhere fast.
That has implications for trades going forward because we could pick up momentum if we can just break out of the current range.
Following Jerome Powell’s latest speech about a long inflation fight – and producer prices rising faster than expected – traders have to get used to this being a slog for the broader market.
There is no quick fix … but there is no catastrophe, either.
Fed President James Bullard’s testy remarks about a .50 bps rate hike at the next Fed meeting sent markets down late yesterday … but his words won’t change much of the overall picture.
That should be good for stocks.
SPY Has Held the Same Range for A Week
The SPDR S&P 500 ETF Trust (SPY) has been stuck ranging around $410 for 10 trading days.
The market hasn’t been in a hurry to get anywhere. That is usually better for individual stocks because they get untied from the bigger market story.
For instance, Cisco Systems Inc. (Ticker: CSCO) – the oldest of the old internet companies – posted surprisingly good earnings numbers.
Every Fed Governor will have the random quote that rattles markets, as Bullard did yesterday. For me, it is the saddest remnant of the Fed’s over-involvement in the market.
I’m hopeful it is their last act as higher rates do a better job of setting US government fiscal policy than the knuckleheads in Congress.
The market moves intraday but is not really going anywhere after the big numbers come out.
410 is the SPY magnet for the foreseeable future as some stability should reign. Things are improving, just more slowly than everybody would like.
To Your Trading Success,
AG