1/6/22 The Fed … A Bullish Bear

Hello! Here’s what’s happening in the market today…

News:

When the Fed speaks the market tends to rally. But when the market reads what the Fed has written it doesn’t always come out as well.

Yesterday the FOMC released its minutes from December. In those notes, the central bank initiated it may be ready to raise rates next year and pare back its balance sheet shortly thereafter … And the market tanked.

Rate increases almost always result in short-term sell-offs. So there’s no big surprise there.

I believe while the short-term outlook may be choppy my long-term outlook remains bullish. A rate increase is a vote of confidence from the Fed that the economy is strong enough to stand on its own feet.

Inflation concerns remain high … But the market previously accepted the Fed’s prediction of lower inflation by the end of the year. So I’m looking for buying opportunities…

Technicals:

There was resistance everywhere yesterday. And no major support levels to be found. This means there could be more selling in the coming days.

The VIX ticked up, but not to a panicked level.
The put-to-call ratio is already initiating the market is oversold.
Most RSI reading remains neutral.

All things considered, I suspect the dip is bought but it may not be for a few days…

Bitcoin did finally break $45,000 support. It could take a while to bottom. I’m in no hurry to load up.

Timing:

As January goes so goes the year. Most of the time a strong start to the year results in a strong year. I’m happy to watch for a few days and let things shake out.

If the market is to continue its bullish run we should have a pretty good idea in the next couple of days.

Futures are mixed … and near flat.

Today I’m bullish but risk off.

Watchlist:

*Low Float

*CELZ is on watch
*IMMX looks to have a bull flag forming … See below
*RELI has support at $8
ASRT has support at $2.40
LQDA has support at $5.50
F has support at $22

IMMX 1-hour candles – Chart via thinkorswim

I liquidated my chart trades yesterday and closed out my TNA trade for a profit. The thesis has changed so there was no reason to maintain the risk.

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