Fed Pivot Potential or Short Squeeze?
This morning’s softer-than-expected CPI numbers triggered an intense upswing in the futures and a downswing in the yields, especially in the shorter end making the yield curve’s inversion a little less steeper. Could this be indicative of the potential for the much-anticipated “Fed pivot” in the near future or is the wild move up (+3.5% in S&P futures as of 9:25am) mainly driven by a short squeeze? The answer is anybody’s guess, and how we close today could reveal some clues.
Our models indicate not chasing this market to the long side, and not staying short either. Hence, we will be sitting out the market today.
Positional Trading Models: Our positional models went short into the close yesterday with the trailing stop in place, which triggered in the overnight futures markets. The detailed p&l will be found in the results published tonight.
Intraday/Aggressive Models: Our aggressive, intraday models indicate sitting on the sidelines and not chasing the huge move already manifest in the markets for today.
IMPORTANT RISK DISCLOSURES AND NOTICES – READ CAREFULLY:
(i) This article contains personal opinions of the author and is NOT representative of any organization(s) he may be affiliated with. This article is solely intended for informational and educational purposes only. It is NOT any specific advice or recommendation or solicitation to purchase or sell or cause any transaction in any specific investment instruments at any specific price levels, but it is a generic analysis of the instruments mentioned.
(ii) Do NOT make your financial investment or trading decisions based on this article; anyone doing so shall do so solely at their own risk. The author will NOT be responsible for any losses or loss of potential gains arising from any investments/trades made based on the opinions, forecasts or other information contained in this article.
(iii) Risk Warning: Investing, trading in S&P 500 Index – spot, futures, or options or in any other synthetic form – or its component stocks carries inherent risk of loss. Trading in leveraged instruments such as futures carries much higher risk of significant losses and you may lose more than you invested in them. Carefully consider your individual financial situation and investment objectives before investing in any financial instruments. If you are not a professional trader, consult a professional investment advisor before making your investment decisions.
(iv) Past performance: This article may contain references to past performance of hypothetical trades or past forecasts, which should NOT be taken as any representation or promise or guarantee of potential future profits. Past performance is not indicative of future performance.
(v) The author makes no representations whatsoever and assumes no responsibility as to the suitability, accuracy, completeness or validity of the information or the forecasts provided.
(vi) All opinions expressed herein are subject to change at any time, without any notice to anyone.
#spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #coronavirus, #bear, #recordhigh, #bidenrally, #vaccinerally, #yields, #fomc, #fed, #newhigh, #stocks, #futures, #inflation, #powell, #thanksgiving, #omicron, #interestrates, #rates, #3855, #3765, #ISM