One aspect of the markets in 2022 that’s different from the past five years is that when Wall Street used to rally off lows, volatility would collapse… And you wouldn’t have a big drawdown for weeks or even months at a time.
For example, we rallied hard last week… only to have the market take a big dump on Friday with the Nasdaq falling almost 2% on the day.
Even with Friday’s sell-off, markets still closed firmly higher for the week with the Russell 2000 and Nasdaq both up over 4%.
Which leaves us with the billion-dollar question: now what?
There’s A TON of information to chew on this week with many market-moving catalysts looming.
This Week’s Economic Numbers That Matter
We have the Federal Reserve meeting, where we already know it will deliver a 75-basis-point hike… But could it shock the world and raise its benchmark interest rate by 100 basis points?!
The Fed funds rate is at 1.5%, and look at all the carnage we’ve already seen in the markets. At 2 p.m. EDT Wednesday, the central bank will look to take it to 2.25%...
As always, I like to play Fed day tight. And the REAL move doesn’t usually happen until the next morning. The market tends to knee-jerk in the last two hours of trading after the announcement, so try not to get caught in that move or worse, chase it into the close. I typically expect a hard flip-flop the following morning.
While I think 100 basis points would be aggressive and lead to a knee-jerk sell-off, you could buy that bottom on Wednesday afternoon. To be clear, I think there’s less than a 10% chance of that scenario playing out…
Microsoft After the Close Tuesday
Some market heavyweights will announce earnings this week including Mr. Softee — Microsoft Corp. (Nasdaq: MSFT). We’ve seen a mixed bag thus far in earnings season with banks like Goldman Sachs Group Inc. (NYSE: GS) and Citigroup Inc. (NYSE: C) delivering solid numbers, and big disappointments from Verizon Communications Inc.(NYSE: VZ) and Snap Inc. (NYSE: SNAP).
Tech has been the most solid catalyst for overall stock buying the past 25 years, so if last week’s rally has real legs, you’ll need big wins from stocks like MSFT.
With many thinking we’re already in a recession, all eyes will be on MSFT’s forward guidance. Earnings per share was already guided slightly lower… so it could get ugly if it misses on already lowered guidance.
MSFT is pricing in an implied move of 4.27%, so keep that in mind with any options you might buy!
I expect a negative move, like a 4% to 5% dip… to a super negative move of around a 10% to 15% drop, taking the stock, which is around $261 a share this morning, back down under $250 a share.
Remember to keep any eye on your inbox Friday for a recap of the week to see how it all played out!
LFG!
Joy of the Trade
P.S. 9 Trades, 9 Wins — You Can’t Beat Perfection!
My 249 beta testers actually did it! FIVE secret patterns have achieved a 100%* win rate on LIVE trade alerts so far!*
All while the markets have been a complete train wreck!
You’re going to see exactly what the patterns are, the historic win rate and profit factor of each… and even get the exact entry and exit rules of the strategy.
All at no cost to you, of course!
This could be the biggest discovery of my entire career, and I can’t wait to share this major breakthrough with you!
*Stated results are typical for given period. Past performance is not indicative of any future results. Trade at your own risk.
A WealthPress Publication
ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. WealthPress provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from Wealthpress LLC are for your informational purposes only. Neither Wealthpress nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. Wealthpress is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit wealthpress.com/terms for our full Terms and Conditions.
0 Response to "The Week Ahead: Big Fed Interest Rate News, MSFT Earnings"
Post a Comment