Tomorrow is the big day, with the Fed statement and projections at 2 PM and the press conference at 2:30. Today looked very much like a short-covering rally, with delta hedging very positive on the S&P 500, SPY, and QQQ ETF. The VIX even moved below 30. So perhaps today saw traders reducing short positions ahead of tomorrow’s big event.
There was no other reason for today’s rally, Asian markets have been a disaster of late, and European markets stalled out. So, the only logical explanation for today’s rally is a risk reduction ahead of tomorrow. Although a slight miss, the PPI print will do nothing to sway the Fed one way or the other. Additionally, yields finished the day flat. So don’t be too excited by today’s rally.
I am a little annoyed because my perfect-looking triangle in the SPY is now not so perfect-looking. But like I said yesterday on the move lower, we need confirmation, which holds true of today. So essentially, today’s rally may mean nothing by tomorrow’s close, and with a giant gap to fill at lower prices, a move lower tomorrow back below is 4200 is possible.
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Nvidia (NVDA)
Nvidia rose by almost 8% today, but you would never know it from looking at the chart. When you look at it, there is nothing worth talking about.
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Amazon (AMZN)
Amazon rose by almost 4% today too, but like Nvidia, nothing has changed.
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Shopify (SHOP)
Shopify also rose by around 8% on the day, but what has changed here, besides nothing.
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