Weekly Raid #24 - Don't be such a Fitch
Good Morning Traders
We have successfully filled a SPY gap to 442.50. With FOMC Minutes due out today, hopefully that means the rally is back on
Lets take a look
News of the day
We have a lot of news due out today. First up is housing starts and building permits at 8:30. This has some market moving potential but probably won’t do much of anything that will last into RTH.
Next up we have some News at 9:15, its mostly industrial news so that sector may be the most affected by it.
We have EIA inventories at 10:30 and this will more then likely affect energy in a pretty stout way, so you can expect XOM on the watchlist today.
Finally we have the big news at 2:00 pm. FOMC meeting minutes from the last rate decision (increase of .25% incase you forgot).
This can really cause some volatility, and I would expect it to remain around if its not a positive outlook going forward. I can really see the market being dead until this release, but with all the other news this morning I would expect some movement today.
Some additional disturbing data has come out on the Macro front.
First up we have Fitch saying that additional downgrades maybe necessary on many banks, including the Big boys like JPM. I have said in the past the Fitch is like the discount ratings agency, but even still that is some potentially problematic news.
Next up we have our favorite start from “The Big Short”, Michael Burry. He is short a 1.6 BILLION (you read that right) notional position on the Q’s and the SPY. Now this is not quite as it seems, Burry used options (something you should be familiar with here on this letter) so the actual position cost is unknown. There is an additional layer of confusion here because the 13F it was filed on is a trailing report. So its possible the position is already closed, but I find that unlikely unless he got margined out (also something I find unlikely).
That XOM position from last week worked out nicely yesterday. The goal will be to close the position this morning and see about reassessing the direction after EIA comes out.
TSLA is taking a bit of a beating premarket as it zips through this Low Volume Node. I have the lower 220’s as the next spot of plausible resistance and then it could be a bit a violent move lower. I have a longer term POC around 195 and if we get under 220, I believe it will act like a magnet.
ENVX is also back on the watchlist for the day. I will look to add to my position somewhere around the 14 handle and lower. This is a long term position for me so I can and will endure any drawdowns. But my cost basis is still in the mid 12’s so I have some room before that happens.
X had a banger of a day yesterday with potential buyout rumors starting up. We will see what happens there, but I think that was a sellable pop so I am going to be looking to sell some Puts today back in the value area.
As always trade well and Good Luck