Stocks Rocket after Fed Decision! Today the Fed left rates unchanged and stated that the tapering speed would double. For those not familiar, tapering is the theoretical reversal of quantitative easing (QE) policies, which are implemented by the Fed. Tapering refers specifically to the initial reduction in the purchasing of and accumulation of central bank assets such as treasury bonds. Surprisingly at first we rallied and then paused as investors read the Fed notes that were released at 2:30. That is when the market started seeing massive inflows. The fact that the tapering will be over by March 2022 was a shock for the market. We expected this to be long and drawn out. Instead the Fed is ripping the band aid off. They stated exactly where they see rate hike over the next two years. This is unprecedented. Fed members play their hikes or eases close to the vest. The reason is if you know that in two years there might be 8 rate hikes, you can hedge your yield risk more effectively. While this is a guide what is important investors love certainty and they got that today. Also calling for inflation of 2% by the end of next year with 4% GDP . Considering that the real GDP is 2.1% right now and we have 6% inflation at a minimum, Powell’s estimates are very bullish for the market. Now we need to see follow through. The next hurdle for the markets are Jobless Claims tomorrow and more importantly Quad Witching on Friday. Quad witching is when stock index futures, stock index options, stock options, and single stock futures expire simultaneously. This only happens 4 times a year. This Friday over 40% of the SPY gamma will expire. That gamma interest is floating right around 4700. Gamma is the rate of change of an options delta. Picture a pin being pulled out on options rate of change when this expires. Below is a video of 5 Stock Ideas for tomorrow. 4 Long Ideas and 1 Short that you can play two ways. If we see follow through I will get comfortable and start adding more long term stock ideas shortly. Key levels are on the charts. Let’s do this!
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Subscribe to You Tube! 👈Subscribe and turn on notifications. There is a new daily video after the market Monday through Thursday! It’s called the Top 5 in 5. It consists of the best five ideas for the next day and I condense it into 5 minutes. Its loaded with actionable ideas. Its worth your time. It is hyper specific and actionable. Tonight’s includes 4 Longs and 1 Short. When you subscribe turn on notifications so you are notified of the daily Premarket live shows ,Top 10 Weekly Buy List and educational videos. The video below is the Top 5 from tonight. 5 Long Stock ideas
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