Discover more from Investor Charts
Context and charts
If you're looking for a galaxy-brain post on dot-plots and what I think the Fed is going to do, I'll save you the disappointment and let you know you can stop reading this now.
One thing on rates is clear to me though: you can fade the medium term weakness. By choosing not to go 50 today all it said to me was the ranges should be quite wide and STIR curves will continue to be volatile / price uncertainty.
Expecting MOVE index to be bid.
I'm also expecting that you get some medium term reversion on the bonds here and rates might come off a little bit. My ATR models show the ~150 area in long end classic June t-bonds as support. 10-year yield price action basically reflecting we may have reached a short-term top.
I think the safe trade is now to try the long side for a week or two. Eventually, it will be a clean sell again but shorting the hole here on bonds is tough. Given where MOVE is and one wants to hold a medium to long-term view, the the 151 puts 5 trading days out are bid for almost 30 ticks.
One thing I WOULD NOT FADE is the 5-10 curve. Doing that trade would mean one is going against all the forces of nature here by taking this position. That's about the extent of my interest rate views.
Stock views? Well, look: we bounced. Not only did we bounce, but literally every market bounced.
Even Bitcoin (which is actually leading)
The breadth thrust is something to behold and could mean that we might have a multi-extended rally and not just a one off that gets faded (which has been the case for almost 2 months now). Typically not great price action after Fed day though.
UPST nice hold of 100.
I'm in the AAPL has topped camp because I think consumers will start to feel the pain of inflation in overhead costs going up and not pick up the latest and greatest iPhone for a modest upgrade on tech. Leaning short biased on pops on this one.
Citigroup confirmed channel low that we talked about.
Would you fade this Visa chart? I don't think so
XBI at the most important trend its been at since the Covid low
For metals, I'm expecting a bounce here as well. Palladium looks like a decent risk reward against this week's low.
See you all in the matrix