Market Pending Direction Ahead Of Fedโs Decision ๐ซฃ
40% gain from another choppy day by taking puts and calls from opening as expected. โ ๏ธ Trading tip: looking at SPY calls above 417.7 and puts below 415.65 on Wednesday, especially after FOMC announcement.
With Monday's and Tuesday's advance, the S&P 500 moved out of the correction territory, while the Nasdaq Composite, with an 11.5% drop from its mid-July highs, continues to be in correction territory.
Close above 420 to confirm reversal play
โThe market climbs a wall of worry, so there is always something to scare investors,โ said LPL Financial strategists Jeffrey Buchbinder, Lawrence Gillum, Quincy Krosby, and Jeffrey Roach.
. โToday investors may feel like that wall is unusually tall, given stiffening headwinds facing the economy, including the effects of rising rates, and two wars overseas as the S&P 500 enters correction territory (down 10% from its recent high),โ they added.
The analysts, however, expect a strong job market, cooling inflation, the end of Fed rate hikes, stable interest rates, and growing corporate profits to help stocks overcome these worries and keep this young bull market going.
โAnd we believe the macroeconomic environment and seasonal tailwinds will provide enough support for stocks to move modestly higher over the balance of the year, though the path may be bumpy,โ they added.
Buy put
Buy call
Buy call
Early indications suggest U.S. stock could strive to retain the winning momentum intact, although key catalysts scheduled for the next couple of sessions could leave investors cautious. Some of the mid-cap earnings have come in better than expected, triggering a strong upward move in the premarket. That said, sentiment toward mega-caps remains muted, and the Nasdaq futures are underperforming the rest of its major counterparts.
The two-day monetary policy meeting of the Federal Reserve kicks off on Tuesday, with investors more focused on what the central bank has to suggest regarding the future rate trajectory at 2pm on Wednesday by the Fed Chair.
A tough August, September & October ๐
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The bottom of ๐ป is around the corner? How are you going to take this opportunity? Share in the comment and let's have some discussion ๐
Not a good time to buy long in long time unfortunately