S&P Sits on Vital Support
A less-hawkish Fed than expected
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Our View
We get a lot of Goldman Sachs and JPMorgan bank research reports and you know what? When you add it all up, they don't really know anything more than you and I. Sure they’ve got the 'quants' and all the research, but they get bombed too.
Why do I say that? Because there has never been anything like what we are seeing today. We have had geopolitical issues before, as well as high inflation and recessions. But never before have we had all of it once along with algorithmic trading.
How do you avoid getting chopped up in this? Well the first one is simple: Don't trade. Put your money in bonds and make 5%+ until the smoke clears. The other option is to trade less and pick your spots better.
I know this is going to sound stupid, but these markets are going to do what they are going to do...chop people up. For me it’s simple, when everyone is long and convinced it's going higher, the markets will sell off. When everyone gets bearish and short, it will go back up.
Our Lean
The ES closed lower yesterday, although not by much and it settled above 4000 — well off the low. There are four more trading sessions in February and my guess is we are in for more of the same action.