The Nasdaq is on the cusp of fresh record highs this morning despite an earnings slip by AMZN, as GOOGL, TWTR, and INTC have helped lift sentiment.
Next week we get the FED. Currently the market is pricing in that 100% chance of a rate cut. Almost 80% odds the cut will be .25% and 20% chance it will be .50%.
Either way the market, in my view, has already priced this in. If we get the bigger cut on Wednesday, I think the path for higher prices short term is there. A .25% might see equities pull back.
Longer term this market looks on the cusp of more record highs. However right here, we continue to bump up against resistance.
Also the $SPY $300 level has been cracked, but each foray has been met with some pushback. It will be interesting to see if we head into the weekend over $300.
I am even more interested in seeing what happens when we hit resistance again. A break through would put $SPY $305 -$310 on the table into late August. A rejection would put $290 back in focus.
Small caps continue to roller coaster around in a ever tightening wedge. I think the price breakout or breakdown will likely dictate where the overall market heads and bears close watching the next few sessions:
With that being said, each new record high in 2019 is met with more and more disdain... trolling of the FED... doubting the reality of the highs. Questioning everything and participating in nothing. That's what I see.
Buying the all time highs... it's not easy --->>
— UPBOptionMil (@UPBOptionMil) July 25, 2019
and yet three years ago investors were faced with the same scenario.
The disdain, whining, complaining, and trolling of the FED is understandable. Notice much of it comes from the same people who have been bearish the last 10 years. Imagine missing out on the bull market of your lifetime. Even worse... Imagine shorting and trying to sell the biggest and best bull market of your lifetime. You'd be pissed to. Of course you may just blame yourself for making those mistakes. Its fairly obvious those trolling the FED don't own a mirror.
We all know that the Pandoras box was opened after the financial crisis. Everything and anything is on the table to inflate asset prices. Yes we know the FED has boxed itself into a corner. They have to keep interest rates low to keep the music playing. And that is what they are doing.
Until interest rates take a meaningful jump higher, the odds remain with those going long.. at least until the music stops.