Watchlist: 12/15 The Market Loves the Fed

Market Notes:

Futures are near flat and choppy after a day of selling. The Fed’s FOMC meeting, which lasts for two days, started yesterday. This afternoon Fed Chair Jerome Powell will announce their policy decisions about tapering, interest rates, and stimulus injections. The press conference starts at 2:30 p.m. eastern, you can watch it here.*

President Biden nominated Powell for a second term at the helm last month. Photo by Alex Wong from Getty Images

What should you expect? History tells us the market loves Powell’s announcements and usually rallies after he speaks. But there’s another factor weighing heavily on the markets right now…

Inflation, as we all know, is high. This was confirmed by the PPI (Producer Price Index) numbers yesterday and again by London’s Office for National Statistics today.

As the market awaits the Fed, I’m waiting for the “January effect.” The Russell 2000 is holding long-term support. It doesn’t get much better than this. I’m holding TNA and fully expect a reversal. It could start today or tomorrow.

IWM 1-day candles – Chart via thinkorswim

As inflation fears grow, bitcoin is showing signs of life. It’s still trading below the 200-day moving average but refuses to break down. Given its volatility and risk, it may rally with the small caps. I’m keeping a close eye on it and HODLing.

Short list today, probably just going to watch and wait. I remain risk on and extremely bullish.

Watchlist:

FHTX has resistance at $18
SEAC has resistance at $1.80

*A previous version of today’s post erroneously stated the press conference was tomorrow (12/16). The post has been updated, we regret the error.

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