Powell’s Sense…with 10:00 CDT update
Posted Sunday 8/28, getting ready for a high volatility day on Monday.
Here are Jerome’s words on Friday August 26, 2022 at Jackson Hole.“Some of you will suffer, but that’s the sacrifice I’m willing to make.”
Those comments by someone with a Net worth in the area of $200m, and who along with his friends and fellow governors have advance knowledge of when to be long or out, or maybe even short.
Maybe Congress needs to require full disclosure reported at end of each week of all investment positions of all FED Governors and related family members, and maybe all senators and representatives, since our world has become a money game.
What he should have said is “Ben and I are the problem. Zero rates and low growth for 11 years have us in a bad place. 3.5 % is rate that has stood the test of thousands of years. In order to be a stabilizing force and provide growth we will use that level for the next 11 yrs.”
My views at the moment..
- I have been steadfast in my belief that the FED should not and will not pivot on rates.
- Secondly, it will be good for the economy to learn to live with a 3.5 % FED Fund rate, rates lower than that encourage investment in low productive ventures.
- I still believe that the market bottomed in the May 11 to June 16th period.
- The reaction of the market on Friday to what was not really a surprise can best be summarized as: a) the big money Fed followers piled back into their short positons, and b) the goof balls, who thought the Fed was going to pivot, ran for cover.
5. My historical market pattern work based around interest Rate of Change structures show that today we have a rare setup, with huge historical volatility, both up and down closes exceeding 3 % for a day like this coming Monday. So, this will not be a day to miss, could be a big up or down by the close, my take is that it will be an up, but the big money is short and may try to make its point.
6. Key question from a market psychology point is how much of all of this FED rhetoric has already been priced in.
7. And for a backdrop, a key factor is the impact of recently passed Fiscal forces in the embrace of climate change and pandemic fixes. This aspect is a key point in my exposure to climate and bio-health investments in our portfolio model.
Model Portfolio detail..
Here is our model portfolio details with recent leverage levels adjusting to market conditions. I tend to limit total portfolio leverage to 3X. Performance since S&P low on 6/16/22 is 46 percent positive through Fridays close. I plan to fill out long speculative positions in Monday’s early trade.
At this moment the stocks in the model portfolio are:
Biotech: ARKG, CGEN, SGFY, TDOC, VIR, CRSP, BEAM, NTRA, FATE, DNA, TWST, NTLA, SSYS, VCYT,
EV: RIVN, PLUG, QS
CHIPS/TECH: ARKK, NVDA, PATH, PLTR, SMH.
SOLAR: RUN, CSIQ, NOVA, JKS, SEDG, ENPH, DQ
10:00 CDT Update…
So far today I have not seen the kind of action that would tell me that the speculative long ETF’s should be bought yet. This actual buy will need to be an intuitive call as the algo’s are already indicating that we are in a big buy area. We will try to keep you informed when we do trigger. We did see the model add to some solar stocks this morning.
10:50 AM CDT update..
It is shaping up that what would feel like the right place to buy would be for SPX to make a new low for the day at 4001, either today or on tomorrows opening, and, or, if you want to buy with confirmation. then take out 4046. We want the bears to dig a hole.