11/1 Recap, Everything Awaits FOMC

We reversed yesterday’s gains today as the market continues to be in a tug of war with how it wants to respond to FOMC tomorrow. The data continues to be quite poor, I’m not so sure what the tv pundits are thinking when they discuss the soft landing vs hard landing narrative, it’s pretty clear we’ve already had a hard landing in equities. Tomorrow should give us more clarity on the direction ahead for the next few weeks. Will the FED press on? Will they pivot? I think anything less than continued 75 bps hiking will be seen as a negative as that means the FED is just panicking.

Look at where the weekly chart is rejecting on the SPY. We tried to break over a key spot and have not been able to yet. We got rejected right where we should. I don’t know if it will be tomorrow, but I still tend to believe we test that red line at the top, the downtrend, and then reverse lower.

The daily chart shows just indecisiveness, and now you can see the MACD starting to form a bearish divergence as it begins to weaken. The weakness in mega cap tech today was really deflating for bulls as the biggest companies in our market, even at a reasonable valuation, still cannot catch a bid.

Here is Amazon, this weekly chart is on the cusp of death. Amazon is finally breaking down, on a weekly timeframe, and a close this week would be the first below that trend line since the FED pivoted during covid. This is a massive technical breakdown and will not resolve anytime soon. I hate to say it but Amazon will be dead money for a long time, even longer than the 4+ years it has already been dead for.

Today’s Unusual Options Activity & What Stood Out

Some really interesting trades were put on today BEFORE FOMC, it caught me a bit off guard seeing how they were positioned into FOMC with tech, banks,etc. Looking at these flows today it’s impressive looking back at yesterday’s report and how SOFI had those 60,000 calls bought into earnings today and it popped, they cashed those in and then it dumped. What a trade that was.