Will Resolving The Debt Crisis Send The Stock Market Much Higher? 🚀

51% gain within 90 mins from taking 3 calls after each breakout from open. QQQ retraced after mid day and broke above 338 after hours. We may see another round of squeeze as bears need to close their puts while bulls join in the bandwagon causing more power surge ahead 🤫 

⚠️ Looking at calls above 339 and puts under 336.4 on option expiry Friday (OPEX). Could be setting up for 344.5 should debt ceiling crisis is resolved next week.

Why I took QQQ on Thursday instead

What’s New?

McCarthy told reporters Thursday at the Capitol that "we're not there" regarding a debt ceiling resolution. "But I see the path," he added.

MCCARTHY tweeted just now: “I just believe where we were a week ago and where we are today is a much better place because we've got the right people in the room discussing it in a very professional manner with all the knowledge and all the background from all the different leaders… I have left the room so now the right people are working on it.

McCarthy indicated that negotiators on the federal debt limit may reach an agreement in principle as soon as this weekend.

"Where we were a week ago and where we are today is a much better place because we’ve got the right people in the room discussing it in a very professional manner with all the knowledge and all the background from all the different leaders and what they want," McCarthy said.

Done in 90 mins

What’s Up?

Biden has indicated that he'd be open to discussions with McCarthy if McCarthy had a plan.

Now, it appears, Graves has been appointed to hash out that plan. The GOP demands are said to be limiting growth in government spending to 1% a year and blocking Biden's student loan forgiveness program. McCarthy also wishes to cut funding for the Internal Revenue Service, impose strict requirements for Medicaid, and stymie Biden’s attempts to create a low-carbon economy to offset climate change.

Treasury Secretary Janet Yellen says June 1 is the deadline. Otherwise, the U.S. government might be unable to pay its obligations and government jobs would be in jeopardy, along with monthly payments to millions of Social Security beneficiaries. 

Also, if the standoff continues, that could exacerbate a recession. Economists expect a recession in the second half of 2023 regardless of the debt ceiling outcome.

I'm worried about the price not moving 🤑

What's Next?

If the players involved come up with an agreement, McCarthy's chamber will pencil in a time to consider the deal by next week.

President Biden has the trump card to call the shots ultimately by invoking the 14th Amendment to dodge the debt limit if really necessary since he is running for the next presidency, so he can't afford more bad news ahead.

Trade #1

Trade #2

Trade #3

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