No Rate Cuts In March
No Rate Cuts In March
Market Update February 1, 2024
The News
March Rate Cuts Are Off The Table
We knew this week would be busy. It's living up to expectations, starting with a powerful report from SMCI that sent the stock well into new highs - a feat that it is repeating today, and doing so in the face of broad weakness across most of the market.
What set it off?
Jerome Powell spoke back and forth like a tennis ball yesterday before finally quieting down. The markets went sharply down as well. His comments sent the message that rate cuts in February are unlikely.
Here is a look at the “red line” of the written statement to show how closely these meetings are scrutinized.
To granular? Probably.
That’s why it’s nice to let the charts do the talking.
The Markets
Throw in several dozen earnings reports and a surprise regional banking hiccup from NYCB, and you’ve got the ingredients for a great near-term shake-up.
To visualize;
This was the QQQ weekly chart shared Saturday morning, with the comment -
“Take a look at the similar Doji candle that appeared a few weeks ago. It was accompanied by an RSI > 70 and led to a pullback.
Might this one do the same?”
Fast forward to today, with one more day left in the week, and we can see that pattern trying to take shape.
Nonfarm payrolls tomorrow morning could still make things change course, producing a different looking weekly close.
We’ll see how it turns out.
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The Charts
SPY just missed an inside day today after yesterday’s Fed-induced selloff. A visit to the $479.50 pivot and/or the 21-day MA near $478 could still be in the cards as easily a trip back to the highs.
QQQ did form an inside day and could also see a test of the pivot and 21-day MA. Above, it will need to get past the 8-day MA before it can see new highs.
IWM failed the breakout and moved sharply lower, helped in large part by the regional bank hiccup. Today, it tested the 50-day MA and got a big bounce. The choppy, erratic behavior continues.
Watch the ATH AVWAP below and the $200 ish pivot area above.
DIA remained stronger than most and earned back much of its dip quickly.
TLT gave a nice jump over the 200-day MA as rates relaxed. That should ease the path for small caps. Maybe a delayed reaction comes?
DXY The dollar remains contained by the swing high AVWAP, and it looks like it could start to break down.
BTCUSD is slow and steady. Some improvement is showing, but so far, it’s not going anywhere quickly.
The Closing Bell
One day left in the Stock Market Super Bowl week.
Nonfarm payrolls will drive the action tomorrow.
Beyond that, it’s worth remembering that February is typically one of the worst months of the year for stock market performance.
So, active traders will likely continue to go a little slower and do a little less.
Back with more on Monday.
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The Disclosures
***This is NOT financial advice. This is NOT a recommendation to buy, sell, or trade any security. The content presented here is intended for educational purposes only.
Andrew Moss is an associated member of T3 Trading Group, LLC (“T3TG”), an SEC-registered broker/dealer and member of FINRA/SIPC. All trades placed by Mr. Moss are done through T3TG.
Statements in this article represent that person’s opinions only and do not necessarily reflect those of T3TG or any other person associated with T3TG.
Mr. Moss may hold an investment position (or may be contemplating holding an investment position) that is inconsistent with the information provided or the opinion being expressed. This may reflect the financial or other circumstances of the individual, or it may reflect some other consideration. Readers of this article should consider this when evaluating the information provided or the opinions being expressed.
All investments are subject to the risk of loss, which you should consider in making any investment decisions. Readers of this article should consult with their financial advisors, attorneys, accountants, or other qualified investors before making any investment decision.
POSITION DISCLOSURE
February 1, 2023, 4:00 PM
Long: JPM0209P172.50, KRE0202P45, XLF0209P39
Short:
Options symbols are denoted as follows:
Ticker, Date, Call/Put, Strike Price
Example: VXX1218C30 = VXX 12/18 Call with a $30 strike