To The Moon

Thanks to Tiger for awarding the weekly top predictions for SPY last week. The S&P 500 lost 0.65% to 5,123.69, while the Nasdaq Composite slipped 1.16% to 16,085.11. Both swung into negative territory after rising to new all-time highs earlier in the session.

Wall Street finished lower after a choppy session on Friday, as investors reacted to a mixed jobs report by booking some profits in the technology space, which has been the engine of the market gains so far this year.

The February jobs data released Friday morning offered some conflicting signals as to when it will be safe for the Federal Reserve to start cutting interest rates.

The U.S. economy added 275K jobs in February, topping analyst estimates of 190K. At the same time, the unemployment rate moved up to 3.9% vs. the expected 3.7% figure.

On one hand, the number of jobs added last month was much more than expected, coming in at 275,000 compared with an estimate of 198,000 from economists polled by Dow Jones. This data can imply the economy is still running pretty hot.

But the unemployment rate unexpectedly ticked higher to 3.9% and wage growth was lighter than feared, offering morsels of hope that inflation has cooled enough to appease the Fed. Data on January jobs growth was also revised lower.

Level up 💪

While the Fed's restrictive monetary policy is putting pressure on economic activity and inflation, cutting interest rates "too soon" could cause damage. That was according to testimony this week from Jay Powell, who reiterated before Congress that there was no evidence the economy was falling into a recession.

It may also be appropriate to "begin dialing back policy restraint at some point this year," but the central bank needs "greater confidence that inflation is moving sustainably toward 2%."

SA Investing Group Leader Mott Capital Management said the Fed Chair pretty much stayed on script, though "he seemed to put some distance" around the dot plot from the FOMC's December meeting.

Ready to break channel & trendline?

Stocks were hurt Friday as an earlier rally in Nvidia lost steam. The artificial intelligence darling finished down more than 5% in its worst session since late May.

Despite that breather, Nvidia shares still finished up more than 6% on the week. It’s part of a monster rally that has added more than $1 trillion to the stock’s market cap in just the new year alone.

To hedge against the pullback, the price action of QQQ looks like a potential short on Monday. Will monitor the tech sector MNQ futures in the morning to confirm the flow for the market. 

Let me know if you wish to get a piece of the action trading futures in the week ahead. Hope to achieve 40-50% in March as I scale up my position 🙏

All green so far 😎

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