Hi everyone,
Today just a quick SPX levels for Wednesday, November 11.
Resistance: 7,543 and 7,577
Support: 7,480 and 7,365
SPX is squeezed between its 100-day and 200-day moving averages. We would need to see a breakout above both resistance levels to feel more confident that the pullback is over. The price action could also be forming a double top or a bear flag.
Following the hotter-than-expected CPI report, traders are watching whether the Fed will raise rates by 25 or 50 basis points in December. A 50-basis-point hike could pressure equities if it catches the market off guard, particularly if the Fed also signals that rates may stay higher for longer. The market’s response will depend on what is priced in ahead of the decision and the Fed’s guidance.
As of the November 10 CME Fed Watch Tool, the market was pricing in a 90.9% probability of a 25-basis-point hike and a 9.1% probability of a 50-basis-point hike.
Our liquidity indicator remains in negative territory, as you can see on the chart. It combines several market signals, including stock and bond market volatility and the strength of the dollar, to help us assess liquidity conditions and financial stress. A negative reading suggests conditions may be less supportive for stocks, so we’re being cautious about taking on too much long exposure.
We’re still actively trading, but when it comes to longer-term investments, we’d like to see valuations come down further and the dust settle around NVDA and the semiconductor sector before getting more aggressive.
We’re adding some incredible new tools to the app, including the liquidity indicator mentioned above. And don’t forget to check out the Newsletter section in TMAD app, where you can read our Substack posts without leaving the app. It’s all connected!
Stay tuned, and we’ll see you for another chat on Thursday at 12 p.m. ET. Link will be sent tomorrow night.
STAGE 4
Be careful with these names, as many are entering Stage 4 markdown. Like Stage 4 cancer, this can be deadly for your portfolio.
$MU