With news over the weekend from AI leaders we are seeing futures open to some weakness. This week will be volatile regardless due to FOMC. I think this market remains choppy and continues to be a challenge for traders. Notice Friday I alerted I had sold all my calls without a second thought, got to enjoy the weekend, and now regardless of Monday’s open we are in good shape for the week ahead. Lets dive in.
Yields
The ten year is tagging near 5 overnight here. My lean is we see this topping soon with FOMC this week.
Energy
Same idea here, think we are getting close
Semi’s
The market leader remains a key watch, it likely opens below this downtrend on Monday. I don’t see how the market can sustain new highs unless this breaks out. Above is risk on, below is risk off.
Catalyst This Week
FOMC is numero uno where we get to see if Warsh raises rates or holds them steady.
Seasonality
You can see this week and the rest of the month risk can remain high from a seasonal perspective.
Across the market really not a lot of strong seasonals over the next 10 trading days.
Final Thoughts
If yields don’t calm down soon, I believe the market could have a nasty correction, but with FOMC this week, I think Warsh tries to calm things down. This is short report this week but I will have a nice deep dive before FOMC. The key strategy I am trying to follow is to stay nimble and patient, let the dust settle during this window, and go out and execute on the other side with plenty of capital. Cheers.
