🔥Fed Minutes Crush Stock Indices

The release of the Fed minutes was a complete disaster. There is no need to sugar coat this. Here is why. We all knew they were stopping the purchases of bonds. What the minutes showed was first that ALL were in agreement that inflation is rampant. Second they ALL agreed they need to do more. Now for the specifics. Their plan is too sell portions of the $9.9 trillion dollars they bought during the pandemic while raising rates at the same time. Essentially rate rises cause investors to sell bonds. So now those investors will be competing with the Fed in bonds sales. As a managing partner from a $300 billion dollar hedge fund put it “This is the recipe for a Financial accident” What was most concerning was how this was very different from what we were told. Also bank stocks sold off. Why ? Because the rate of increase of yield could be far more than anticipated. This caused high beta , utilities, basic materials ,financial companies all to sell down. Essentially this could lead to a massive sell down in equites. You have to look no farther than the release of the minutes to the selling acceleration. It’s very important to note. This is day one. This does not mean its over. Its just beginning. Right now its best to let this sort itself out. Any attempt of buying breakouts today failed. Stocks broke out of huge bases on heavy volume and collapsed by end of day on the news. As more large funds as the ones above try to position themselves by reducing risk, it becomes an real issue. More and more investors could pile on and we could have a “financial accident” I am not one for hyperbole so when I say this statement has significant risk attached to it. I mean it. Look at the QQQ and IWM both rejected there 50 day moving averages. The main leaders of the Nasdaq such as AMD and NVDA broke their 50 day moving averages. Overall its best to have a very short term mindset to trading until we see how this plays out. I list 4 shorts and 1 long in the video below. Its 7 minutes long. Its worth your time. I explain why bitcoin has a significant issue and what VIX ETF to buy. Lets get to it!

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