Major averages finished mixed on higher, quadruple witching volume. With renewed headwinds from the Federal Reserve regarding their hawkish stance on interest rates and shrinking its balance sheet, the NASDAQ Composite Index is attempting to stabilize along its 50-dma following the ugly tech sell-off seen two Fridays ago. Despite the bearish backdrop, QE remains in full effect, so as long as the index can hold the 50-dma it stands a good chance of setting up again and making a bid for the prior highs. A breach of the line, of course, would be a very bearish development, and would likely correspond to super-cap technology names also breaking down as some trace out pennant formations.
Futures are gapping higher on no material news event though QE is most likely at least partially responsible. Each year brings with it new market manipulations and thus new challenges. QE has been the chief tool of manipulation as global central banks have actually increased its pace over the last few years. Meanwhile, the US is on the path of tightening/tapering.
Investors will hear from a slew of Fed officials this week. The fed funds futures market currently points to the March 2018 FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 53.7%. The implied probability of a December rate hike has dropped to 41.3%.
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.