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Market Musing 7-26-2202, Fed Watch and Tech Earnings Watch

PUBLISHED Jul 26, 2022, 3:37:50 PM        SHARE

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  1. High Volatility: VIX > 23. SPX overall is bearish. Remember that you “can not fight the Fed.” Well you “can not fight the ECB” either. Last week, between the surprise 50 basis point ECB rate hike and new QE Unlimited ECB bond buying, all markets including all US Major indices enjoyed a one week bounce. The Dollar even experienced a corresponding 1 week selloff from its 20 year high. However, we do have a Fed Rate Hike of 100 or 75 basis points on Wednesday. Should temper this rally some, as the stagflation economic numbers and earnings are released this week. The new expected SPX range for this week: 4058 top and 3865 bottom.

SPX chart

Michael Burry Tweet

Sell Put Credit and Call Credit Spreads. Buy Put Calendars, Ghetto Spreads and Butterflies on overbought Stocks and ETFs.

  1. US Dollar and 10 Year Interest Rate:

    The US Dollar is pulled back to 107. Significant drop from the 109.294 a 20 year high. A weakening Dollar helps US Markets and Commodities this week. The 10Y Note Interest has stabilized around 2.8% while 30 year fixed rate mortgages are around 6%. The Yield curve has inverted with 2, 5 & 7 year yields higher than the 10 year. Fednow is forecasting a negative 2% GDP for 2Q/2022. This is a sign of the Stagflation (ie Recession plus Inflation). Long Term the US Dollar decline is still intact with Fiscal and Monetary stimulus flooding the world with US Dollars.

DXY chart

https://www.atlantafed.org/cqer/research/gdpnow

Evolution of Atlanta Fed GDPNow real GDP estimate

  1. Crypto Currency: Bitcoin range bound between $22,500 to $18,500. Bitcoin did a look “above and failed” outside of this range. Cryptos too are interest rate sensitive. Long Term and Institutional Investors are using this DIP to Dollar Cost Average into both Bitcoin and Ethereum. Corporations, Countries, and Institutional investors are accumulating large Bitcoin positions. Please continue to Dollar Cost Average into Bitcoin and Ethereum. Crypto winter will last for another 12 months, as we wait for the next Bitcoin Halvening in 24 months.

https://support.tastyworks.com/support/solutions/articles/43000612831-available-cryptocurrencies

BTC Chart

BTC vs US10y

  1. Tasty Works Algo Trading System: James at Quiet Foundation

Alpha Boost ideas, sign up https://info.quietfoundation.com/alphaboost

https://issuu.com/luckbox/docs/2111-luckbox-site/56 Alph Boost Article

If you are new to options or this blog sounds like gibberish, please tryout Tasty Trade’s New 2020 Education. Includes 40 Videos, Testing and you get a certificate of completion at the end of the course.

https://tastytrade.thinkific.com/courses/beginner-options-course

  1. TRADE Log: VIX > 23
  1. Jade Lizards - AMD, ZM

  2. Put Broken Wing Butterflies - TSLA*, GOOGL*

  3. Put and Call Credit Spreads - IWM, KWEB,TBT, UNG, EWZ

  4. Put Calendars - FFIE, NKE, XHB, PLTR, DWAC, EWJ, EWG, BA

  5. Upside Ghetto Spreads - AMZN*, TSLA*, GOOGL, SAVA, RBLX, ARKG, GOEV

  6. Downside Ghetto Spreads - SPY, QQQ, EWG

  7. Collars - AAPL*, JNJ, F

  8. Weekly Butterflies - SPX *

  9. Covered Calls - KO, PDBC

trade mechanics

  1. Video and Articles

Invest Answers: Is Macro Bottom in? Plus Earnings Seasons Update

https://youtu.be/i21t4ZxY87Q?t=526

Key releases this week

https://theotrade.com/here-is-why-an-onslaught-of-volatility-is-coming/

Ray Dalio - The 5 Key Signs of an Empire in Decline

https://youtu.be/J5Y2eg_ZyXA



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