Dear Reader,

If you’re a bear – it’s gotta be hard to be shorting overvalued stocks right now – and watching them rally. Chargepoint (CHPT) is up ANOTHER 5.5% today, despite the fact that it’s a profitless company trading at 10 times sales. 

How does any of this make sense? 

Well, it all comes down to sentiment, liquidity, and capital inflows/outflows. 

That’s what we do here at Midday Momentum. We’re constantly stalking the market for the optimal conditions to be a Breakout Bull and a Breakdown Bear. It all comes down to timing. So, let me show you what I’m seeing today – and why it’s time to prepare for some very erratic behavior in this market.

So, What Happened Here?

If you’ve been watching my show over the last week, you know I’ve discussed market liquidity. The Fed has been cutting its balance sheet over the last year. That’s the first issue.

The second is that FOMO takes the market by storm regularly. I recall back in August when this market screamed above 4,100… and Kenny Glick and I set the target to the same level. 

We said 4,300 – 200-day moving average – new level of support. And when it hit that level, this whole thing went Kaput… all the way down to 3,600. 

I note that Powell said a few small clues that matter. First, he said “short term conditions” – a clue that something could happen soon that pushes Financial conditions in the opposite direction. Perhaps that’s the Treasury Department’s efforts to keep this thing afloat.

I stress this – an end to the Debt Ceiling debate will be bearish for markets – as the Treasury’s extraordinary efforts aren’t needed – and Janet Yellen can go back to doing whatever she does when she’s not pouring capital onto the fire. 

Second, the Fed will likely increase its balance sheet tightening more and more. 

Powell said that we aren’t at restrictive levels yet and suggested that policy is tightening. 

He might not have been speaking in the Present Tense

He might have been trying to articulate the Future Continuous Tense (Will Be), and it came out wrong. Yes, Powell’s speeches have been getting “less hawkish” in recent months – but I think he’s failing to articulate his case. He’s clearly frustrated. 

Right now, you want to be riding this event higher.

But you also want to know when the music is about to stop… and when it stops completely. 

That’s what I do at Flashpoint Trader and Hyper Momentum Trader

Every junk stock is climbing up this mountain right now. The S&P and Russell 2000 are screaming toward overbought conditions. When the music stops – I will be the man sitting in a chair already, throwing grenades at the worst stocks in the market. 

We did it all last year. We’ll do it again. 

For now, ride momentum higher. 

But always be prepared for the day when this music dies.

Today’s Momentum Reading


Broad Market: Green
S&P 500: Green

Recap: The World’s Biggest Indicator (Momentum) is GreenRelative momentum is still strong, and liquidity in the market remains robust. We saw yet another big reversion play off the second standard deviation at 10:15 am  – and all of the crap in this market just keeps SCREAMING higher. The FOMO is now underway, so be sure to use stops on the way up and start to prepare for the Hyperturn when it arrives – because when this thing goes – it could be the biggest drop of the last 52 weeks. It will all come down to liquidity and when funds decide that a risk-off event is worth their while.

Flash Points I’m Watching

Flashpoint No. 1: Reversions, Reversions, Reversions.

Reversion season is in full swing. Once again, we found three bounces – but one big one off the second standard deviation band that sent the market screaming higher. It’s unreal.

Flashpoint No. 2: Liquidity is the Only Thing That Matters

Jerome Powell absolutely lost control of the market yesterday, and the Fed’s worst nightmare is coming true. When stock market assets rally like this – delusionally – it is an inflationary event. Economic conditions have loosened since October – and Powell punted on the question about this basic situation. I can’t imagine that this ends well, but for RIGHT NOW, the market has the path of least resistance to the top of a new channel – 4,300. 

In fact, the former FDIC Chairman Thomas Hoenig explained that the Fed now has a credibility problem. In an interview with Fox Business, he said that the central bank is talking tough on the market – but that its words are not enough. Damn straight. But we don’t care right now if momentum is green. Just enjoy the sunshine – as we’re clearly in the eye of a storm.

Today’s Hot Long Shot

Swing and a miss yesterday on the SPXU long shot. Now we look the other way. The path of least resistance for this market screams to 4,300. And let’s just buy to open the SPY $430 call for next Friday, February 9, 2023 for $0.35 or less.

What You Missed

Have you been hearing the chatter from Washington, D.C.?

They want you to pay attention to the never-ending discussions about raising the debt ceiling.

But we know that successful traders don’t get caught up in politics.

They trade them for profits.

That’s why I developed a formula to identify how specific events trigger massive spikes in the market.

That formula helps me jump on a market move – whether up or down – and cash in on it.

We’re talking about explosive gains in just a few days, based on extensive backtesting we’ve performed.

In this video, I’ll show you exactly how this works:

Watch the full video here

Stay Liquid,



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