__________________________________________________________________________________
The best tool for trading high volatility.
__________________________________________________________________________________
Monday March 17th
__________________________________________________________________________________
“The only intelligent tactical response to life’s horror is to laugh defiantly at it.
– Kierkegaard
__________________________________________________________________________________
Howdy folks! We have a stacked week this week with market events. The first one — and most important — is the Fed’s next FOMC decision on Wednesday. Then on Thursday we have the initial jobless claims and existing home sales.
I doubt the Fed’s remarks will have much effect. In my estimation, Powell has taken a backseat to Donald J. Trump when it comes to moving the markets. It will be interesting to see if they become dovish again after being so hawkish last month. After all, the latest PPI and CPI readings were softer than a kitten’s fur.
On a more macro lens, Scott Bessent continues to tell everyone what the administration’s plan is:
To crash the market.
They want a deflationary wave. Which is really the only way to stop inflation. (We may be seeing a little bit of this in the monthly inflation readings). Once they crash the markets, they can tampo down inflation, then cut regulation and spur investment, then rates come down and the markets go BOOM!
If it works, it will be a brilliant plan! But of course, for it to work, that means the markets have to sell off. I still think we could hit at least the SPX 5,000 mark. Maybe even $4,300.
So, whenever going long, we must keep this fundamental fact in mind that the Trump Put is still being coordinated in the background. And stay wary.
Our weekly SPX levels are fairly simple.
The 200DMA plus the volume shelves at around $5,710 are our resistance. This a very important level. Should we test and fail, more downside will likely come. Should we break over, we could retrace at least half of this 10% correction. On the low end, the only real support line I see right now is the $5,407 mark.
Meanwhile, VXX is dropping and the Yen is weakening against the dollar. As of now, all of this is bullish for the markets. But that could change day to day, so we will keep an eye on it.
Let’s get to individual levels for this week.
PLTR
I recommended the 21 APR 25 $100 in last week’s newsletter at $1.84. It’s now at $2.84. Around a 60% gain.
DG
I also recommended DG 17 APR 25 $90 CALL last week at 0.60. I exited at 0.80 with a 30% gain last week.
QBTS
QBTS is a high-beta quantum computing stock that will rally should the markets recover. I like the 17 APR 25 11 CALL if it can get gotten below $2.
__________________________________________________________________________________
__________________________________________________________________________________
Testimonial of the day
Steve about the Wave Indicator:
__________________________________________________________________________________
To Better Trading,
Alex Reid
