Nothing but bad Headlines today…with 1:20 PM CDT update
This is a big moment for the FED, they are behind the curve and will be even more behind the curve after today’s meeting results, but they will have to talk tough.
Regardless, after an initial kneejerk down in asset prices to test recent lows, or maybe not, we are already seeing the first push down this morning by the speculative shorts, the market will start ignoring the FED and do its own thing after the inflation reports early next week.
Inflation will become the fuel of asset prices in this early round. A year from now, watch out.
Initial 1:20 PM CDT update….
The 1:00 FED key points were on the dovish side, especially the QT comments saying it would start at 47 billion per month in June and then going up to 95 billion in August.
The bearish side of the FED meeting should come out in Powells press conference; he will talk tough. But the key thing going forward into the August period will be how the second guessers will try to pound the FED as bad inflation numbers come out, starting with next Wednesday’s CPI.
What I am seeing personally is how main street operators are taking on the psyche that there is nothing to stop raising prices. Two examples that I have seen in the past couple of weeks, my storage space raised their prices over 30 % since the beginning of the year, and while I do my own mowing, I hear neighbors screaming about landscapers raising rates by 20 to 25 %.
In the very short-term, speculative short sellers in stocks are the predominate factor in the markets. Watch this aspect closely. An extreme opportunity will evolve when this situation flips.
Update after the close…..
Very interesting late move, it turns out that the covering of the speculative shorts was the message of the day. Powell didn’t really add any new news, certainly nothing bearish. So, going forward trading from the long side with discipline will be important, bad inflation numbers will continue to dog the market.
I still believe that practical tech, semiconductors at the core, if you will, will be the play as everyone has seen what climate factors are doing to their lives, high winds, flooding, heat to come this summer, are the driving force. SOXL ETF remains my focus.