It Comes Down to This
Dear Reader,
This week, the markets are focused on the Fed meeting.
There’s a lot to unwrap. The economy – despite the GDP report last week – is weakening at a time that liquidity is expanding. There’s a lot to unpack here.
So, why not look at the chart that matters most.
The Line in the Sand
The best chart on Finviz is free.
Even if I try to sign in, I can’t find this.
But it’s the SPY chart that pops up on the S&P 500.
The top pink line is the top of a channel that has tracked this market back to January 2021 when we hit an all-time high on the SPY and worries about Fed QT policy first hit the market after the release of minutes from the December 2021 meeting.
The blue line on the bottom coming off the June selloff through the October selloff is the technical support for a downward channel.
You can find that support almost starting all the way back in October 2021. So – there is a clearly established trend of lower highs and lower lows set by Fed rate policy and ongoing fear. We hit overbought conditions and oversold conditions.
Talking heads were buying and talking new bull market at the highs… and telling people to get out of the market at the lows (Because this is beyond a psychological exercise that people just can’t master no matter how many times, they’ve seen it).
Contrarian thinking is quite rare.
We’re going to react this week… but today is an ugly start to what may be an ugly week.
Today’s Momentum Reading
Broad Market: Green
S&P 500: Green
Recap: The World’s Biggest Indicator (Momentum) is Green…
Momentum is positive, but a selloff is starting. Do yourself a favor. Take gains if you’ve been following our indicator all month. You want to be as liquid as possible at 2 pm come Wednesday when the Fed meets.
Flash Points I’m Watching
Flashpoint No. 1: Classic Topping
Ark Innovation (ARKK) is breaking down today pretty bad. And the deviation bids aren’t working on the third standard deviation move. Remember – us stops. This is a tough market on a tough week. Be protective.
Today’s Hot Long Shot
Buy to Open the SQQQ $47.50 call for Friday, February 3. This is a long shot – and it’s based on the idea that this market sells off. Will the market sell off? I have no idea. But that’s why you play the odds and bet small.
WHAT YOU MISSED
If this week’s Hyper Turn is anything like these – hang on to your hat.
It’s time to back up the truck and milk this market for all it has.
In this video, I explain how to play Hyper Turns and extract as much money as possible from each one.
The first one is locked and loaded – and there’s still time to get in.
Remember, Hyper Turns are fast… and so are the plays.
This is not buy and hold… this is money now.
Everything you need to know is here.
Stay Liquid,
Garrett
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January 30 2023
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