2/5 Recap

We gapped down slightly then got a big move down on a really strong ISM print. Powell was on 60 minutes last night saying people were too optimistic about rate cuts and he doesn’t see the first one in March and that there would be fewer than anticipated. Now we’re back to the 2022/23 trade of what will or won’t the fed do everyday. If rates stay elevated that isn’t good for small caps or companies with lots of debt, on the flip side if rates stay elevated, the big winners are the large companies with lots of cash and minimal debt. This morning Goolsbee from the fed said he thinks March rate cuts could still happen. The fed loves creating drama.

The SPY remains firmly entrenched in one of the strongest uptrends of all time. We’re now 3 months into this run and in that time we’ve had 1 close below the 21 ema(light blue) . That is just remarkable. Today we came down and almost tested the 8 ema(dark blue) but have so far moved up to highs. With big tech reports mostly out of the way, only NVDA remains in 2 weeks, this is usually where the market cools off for a bit, but until we close below one of these ema’s there is just not trend shift.

Oil made a massive reversal last week right after breaking out posting that bearish engulfing and turning back lower. Today it tested multiweek lows and immediately got bought back to the days highs. This trade is schizophrenic, there’s nothing else to say, oil is moving from one headline to another, up and down 10% like a penny stock.

Look at TNX below. Yields went higher again, if you’re objective, this looks like a double bottom on the chart. Yields appear to want higher while everyone is positioning for lower yields. The chart is the chart, TNX has room to 43+ here unless it breaks down quickly. TLT was down 2% today sending warning signs.

Trends

1 Week

2 Week

Year To Date

Today’s Unusual Options Activity

The database link for today is below and will be up until the market open tomorrow. As always I will add the trades from the rest of the session after I send out the recap by this afternoon so check back then to get updated trends and trades.