You all need to relax.

Trading 101 is only trading when you have an edge. When price is making new highs and new lows within 30 minutes of each other, it's just better not to play.

Don't be surprised if we rally tomorrow. Last couple of times there was a rally then a puke.

What a day. This is a crazy market! Maybe we'll hit 4000. And 3600. Before lunch tomorrow.

8 of the last 10 FOMC events have led to a market rally

Source: Bloomberg, Valérie Noël pic.twitter.com/XA0SJJHVdA

— Cheddar Flow (@CheddarFlow) September 21, 2022

Bnels1323 said:

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Current market expectations for path of Fed Funds Rate...
-November: 75 bps hike to 3.75%-4.00%
-December: 50 bps hike to 4.25%-4.50%
-Feb 2023: 25 bps hike to 4.50%-4.75%
-Pause
-Rate cuts start in Sep 2023, continue in 2024...

Upward shift of 25 bps today after FOMC statement. pic.twitter.com/kfC6peRe8u

— Charlie Bilello (@charliebilello) September 21, 2022

Thought this was interesting for long-term outlook

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***WARNING: Long and slightly rambling post***

I think this long-term view is wildly optimistic, for any number of reasons:

• They don't truly understand inflation and the damage it has done to the economy and to the savings of middle class and upper-middle class Americans. The S+D has not balanced out yet. This holiday season is going to be a bloodbath for retailers, IMO.
• The damage from inflation isn't magically fixed once we are back at a "normal 2%" level. We're still left to stomach the impact and just start over from a new baseline.
• Who knows what will happen geopolitically, but I don't see total supply constraint relief in the next 6 months for anything that isn't completely sourced and manufactured here (very few things anymore).
• Energy cost isn't done going up. And not just talking about oil or us playing games with the numbers or the SPR. Look at Europe for a view into what natural gas is going to look like here when the Marcellus and Haynesville fields start to degrade and look more like the Barnett.
• Other impacts on the monetary supply and on the liquidity of the treasury markets may throw wrenches into any plans.
• The government is still launching inflationary initiatives to buy votes such as the half a trillion in student loan forgiveness we just announced. (as well as the misnamed Inflation Reduction Act and the CHIPS act). You're looking at a government deficit of $1.7-2.0T next year.
• Any anti-recessionary initiatives that will be announced will be inflationary and continue to work against the Fed's attempts to reign in inflation. All this when we actually need austerity.
• Bias. There are traders on these desks with 15 years of experience who don't know anything except a huge Fed and ultra-low rates

Why would the Fed turn right around in a year and start cutting rates? I'd flatten the predicted plateau out a bit longer into 2024 at least before they will be able to do that. Maybe longer or maybe even higher peak. But who knows, maybe the Fed will bow to political pressure and start up fresh rounds of the QE and interest rate cuts to which we're so addicted. Maybe the Treasury won't have the stomach to eat the deficit (starting today, the Fed is operating at a loss going forward). I don't know.

The ultra-low rates that allowed for misallocation of capital into poor capital projects and were a lifeline companies that should have been put out to pasture years ago has done the same thing to our government budget and deficit. Sub-optimal decisions have been made for too long because there hasn't been any consequences.

The longer you prop something up the more painful the fall is going to be in the end. We've been delaying this time for over a decade, and sure, we could keep trying to find ways to delay it (and maybe someone smarter than me will find a way to fix it all). The government's endless spending and complete refusal to even come close to balancing a budget is finally starting to really bite us. We're out of bullets to fire.

To quote Grant's from one of the past few weeks... inflation isn't an accident. It's a policy. I may not be as experienced in the daily execution of trading and options (getting better every day), but my entire career has been focused on macroeconomic trends and policy and I can't fathom a world in which we immediately turn around and cut rates 12 months from now without it making our current inflation look like a walk in the park. It'd take peace in the world and the global supply chain going back to a perfect JIT system like it was circa 2018-2019. In 12 months.

I don't know about short-term, but I'd expect to see new ATLs before new ATHs, and by a long shot.

You said all time lows. I don't think you mean 1930s lows. Let me know if I'm wrong. We are not going to see 2001 and 2009 lows either. In fact, my absolute floor is 2750.

Thanks again to contributors in this thread. Easy to get down while the market is cratering, but swing trading spy options (and for me trading MaRA channels) has helped dull the brunt of losses in my long account (much more important but I don't actively trade it)

$30,000 Millionaire said:

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You said all time lows. I don't think you mean 1930s lows. Let me know if I'm wrong. We are not going to see 2001 and 2009 lows either. In fact, my absolute floor is 2750.

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You're right. I misspoke in my haste to get out the door.

Call it 5 or 10 year lows vs ATHs. I think we'll see the 2000s for sure. I think we'll test 2016, 2019, or COVID 2020 lows in the low 2000s. In real vs. nominal terms they very well may be 2009 lows. If you made me bet if we saw 5000 or 2500 next, I'd bet on 2500. But seeing 2016 lows below 2000 nominally would surprise me given inflation.

Bought some TQQQ at 22.7

Buck Compton said:

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$30,000 Millionaire said:

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You said all time lows. I don't think you mean 1930s lows. Let me know if I'm wrong. We are not going to see 2001 and 2009 lows either. In fact, my absolute floor is 2750.

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You're right. I misspoke in my haste to get out the door.

Call it 5 or 10 year lows vs ATHs. I think we'll see the 2000s for sure. I think we'll test 2016, 2019, or COVID 2020 lows in the low 2000s. In real vs. nominal terms they very well may be 2009 lows. If you made me bet if we saw 5000 or 2500 next, I'd bet on 2500. But seeing 2016 lows below 2000 nominally would surprise me given inflation.

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Covid lows on SPX was around 2350-2450 when 6 month to 1 yr stay at home was being floated about, especially by that lying crying ********** that went on CNBC. There was fears of massive global deaths and idiots hoarding toilet paper instead of non-perishable food at the time. I just can't see higher interest rates and recession can repeat mass panic. Now, if Putin launches nukes and/or China attacks Taiwan, then we're in agreement somewhat. If either of those happen, those covid lows will be easily taken out. It won't matter though, because the world is ****ed.

ETA: apologies for the grammar. I'm on an iPad

The iPad made you do it? Lol.

Thou shalt not blaspheme the magic elixir

We Bears know a few things about the "Thou Shalts….".

Philip J Fry said:

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So what happened at 3pm that caused this nose dive?

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Powell said the housing market has to tank to curb inflation.

Breaking 3800 we lost the trend line from Covid lows, to this years lows. If they can't recover that, probably uglier tomorrow.

Wow y'all had fun today.

Only exited the rest of the VIX calls on the spike. Sat on sidelines the rest of it.

Red trend line its at is 3/2020 and 6/2022 lows. We shall see…..




Trade wisely my friends…..

lobwedgephil said:

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Philip J Fry said:

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So what happened at 3pm that caused this nose dive?

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Powell said the housing market has to tank to curb inflation.

Breaking 3800 we lost the trend line from Covid lows, to this years lows. If they can't recover that, probably uglier tomorrow.

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futures look like they want to at least test 3770. I'm guessing continuation down into the morning.

interestingly the last time we had a day like this was September 13th. High of 403, low of 392. Bulls were able to almost retrace it 50% the next day, closed looking like a neutral (but slight green) spinning top. and then we sold off again the day after! .

There are 2 threads about Fed rate hike on F16. Might be good indicator we are getting close to a relief bounce.

On other hand, 3775 major support is breaking down now on futures.

A technical case or a fundamental case?

It keeps making lower lows, demand for chips is likely dropping, and though the divvy is nice, I'd like to see their next earnings report to see if they reduce their dividend. Negative quarterly revenue growth, more debt than cash (35B against 27B) in a rising interest rate environment, I wouldn't touch it.

Do I sound down on this? My broker (now former broker!) put me in this dog at $50 and gave me grief when I told him to put a $48 stop loss. he did not put a stop. I sold at $36 and it's now at $28.

From a TA perspective there doesn't seem to be a good reason not to. Support/resistance of 28-29ish dating back 15-20yrs (if going back that long even matters...). Almost at -3 ATR on the daily, below -3 ATR on the weekly, almost at -3 ATR on the monthly. Hopefully some of those thing are the same things you're seeing?




On a side note, you still holding the LABU bought a few days ago?

Sold most of TQQQ. Set stop at break even in the rest.