2023 Picks Up Where 2022 Left Off
Plus, a potential trade in MSFT.
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Our View
Well, things picked right up where they left off in 2022 — sloppy, choppy and range bound. One thing for sure about the current price action is selling the big gap-ups. More broadly, the market continues to sell into strength, with each rally acting as a “last gasp” for longs to bail out of their positions.
Put simply, no rally has been able to last lately.
If you look at the ES daily chart, it was clearly rejected from the 3900 level but — and there is always a but — it's still holding 3800. My question is, “for how long?”
By the way, be sure to read our Guest Post from earlier this morning. It’s written by one of my friend’s — Rob — of the Discovery Trading Group. It gives a very unique insight into rates and the potential path of the Federal Reserve. Even for index traders, this is important stuff.
Our Lean — Danny’s Take
Today is the ISM number and JOLTs data at 10 am ET. But more importantly, the Fed Minutes are on tap today at 2pm. You know what that means: Even without a rate decision (the next rate decision is scheduled for February, with odds currently pricing in a 25 bps increase), the algos always have a field day in the afternoon of Fed days.
Our Lean: