9.16.24 Retail Impact, $SPY, $AAPL

Summary

In this Insider Access briefing, the speaker discusses the S&P 500's alignment with market projections and the potential for a 50 basis point rate cut by the Fed, influenced by upcoming US retail sales data. They emphasize the importance of gauging market movements accurately, highlighting the mixed market sentiment and the anticipation of a 25 basis point cut unless retail data indicates otherwise. The speaker also touches on the neutral stance towards Apple, suggesting potential trading opportunities based on market fluctuations and the FOMC meeting's outcome.

Takeaways

• 📈 The S&P 500 is in line with market projections, indicating a period of consolidation.
• 📉 There's a potential for a 50 basis point interest rate cut by the Fed, which could impact market sentiment.
• 💼 US retail sales data is crucial for informing the Fed's decision-making and could influence the economy's momentum.
• 📊 The market is currently mixed, with some sentiment lifting towards a possible 50 basis point cut.
• 🔄 The speaker advises to gauge the market accurately without bias, focusing on what the data indicates rather than personal expectations.
• 📅 The FOMC meeting is highlighted as a significant event that could determine the market's next move.
• 📱 The speaker remains neutral on Apple's stock, suggesting opportunities for both shorting and going long depending on market conditions.
• 💹 The speaker anticipates resistance in the S&P 500 around the 5651 to 5670 range, requiring a catalyst like a strong retail sales number to break through.
• 🚫 The speaker warns against deploying capital heavily during sideways market days, advocating for patience and strategic trading.
• 📊 The speaker emphasizes the importance of understanding market consolidation zones and their implications for future trading opportunities.

Q & A

What is the main focus of the Insider Access briefing on September 16th?

The main focus is on the general markets, specifically the S&P 500, and the anticipation of the Federal Open Market Committee (FOMC) meeting and its potential impact on the market.

What is the speaker's stance on the S&P 500's movement during the rally period?

The speaker emphasizes the importance of gauging the market accurately and not just looking for what one wants to see, but rather what the market is indicating, especially during a rally period.

Why is the speaker discussing the US retail sales data in the context of the FOMC meeting?

The speaker believes that the retail sales data could inform the Fed's decision-making process for the upcoming FOMC meeting, as it provides a high-frequency data point that may influence future GDP revisions and economic momentum.

What is the speaker's expectation regarding the FOMC's rate cut decision?

The speaker expects a 25 basis point rate cut, but notes that a more significant 50 basis point cut could be considered if the retail sales data comes in negative, indicating a potential slowdown in the economy.

How does the speaker view the potential market impact of a negative retail sales report?

The speaker suggests that a negative retail sales report could put pressure on the Fed to consider a 50 basis point rate cut, which could have a market impact due to the gap between the current and the next FOMC meeting.

What is the speaker's strategy for trading during periods of market consolidation?

The speaker advises against deploying capital heavily during consolidation periods, as these are often sideways days where the market doesn't provide clear directional signals.

What is the speaker's view on the iShares Russell 2000 ETF (IWM) after the market's movement?

The speaker views the iShares Russell 2000 ETF as holding gains and remaining positive, with projections of 212 to 216, and potentially reaching the top end of 220 if the FOMC meeting is agreeable.

Why does the speaker think investors might be betting on a 50 basis point rate cut in the TLT?

The speaker suggests that investors might be betting on a 50 basis point rate cut in the TLT due to anticipation and the desire for a more aggressive move by the Fed, despite the speaker not seeing such an indication from the Fed.

What is the speaker's stance on Apple's stock during the period discussed?

The speaker maintains a hyper-neutral stance on Apple's stock, indicating that they will short when it's overextended and go long when it's oversold, without a strong bullish or bearish view for a sustained period.

How does the speaker plan to react to the retail sales data release in terms of trading strategy?

The speaker plans to use the retail sales data as a potential opportunity for trading, either by taking a short position if the data is negative or waiting for a bounce if the market reacts positively.

Outlines

00:00

📈 Market Analysis and Expectations

The speaker begins by dating the briefing and setting the scene with a focus on the S&P 500, which is moving in line with projections. They discuss the market's tendency during rallies to anticipate significant moves, either to new highs or corrections to lows. The speaker emphasizes the importance of accurately gauging the market, focusing on objective analysis rather than personal desires. They mention the market entering a high zone with expected consolidation and discuss the potential impact of a 50 basis point cut in the federal funds rate. The speaker also highlights the importance of US retail sales data, suggesting it could influence the Federal Reserve's decision-making process. They speculate on the market's reaction to a negative retail sales figure, which could pressure the Fed into a larger rate cut. The speaker concludes by noting the market's sideways movement and their cautious approach to capital deployment on such days.

05:01

📊 Post-Market Movements and FOMC Expectations

The speaker discusses the after-hours movement of the IWM index, which held gains from the previous day. They review their projections for the index and connect them to the potential outcomes of the FOMC meeting and rate cuts. The speaker also touches on the Dot Plot projections and anticipates a busy day ahead. They move on to discuss TLT, an investment vehicle inversely related to the 10-year Treasury yield, and suggest that its strength is due to investor bets on a 50 basis point rate cut. The speaker advises caution, as they have not seen such an indication from the Fed. They also mention their neutral stance on Apple, detailing their past trades and the current strategy of taking short positions on overextensions and long positions on oversold conditions. The speaker concludes by stating that Apple's movement is influenced by the broader market and that they are watching for a bounce at a specific price point, influenced by the FOMC meeting and retail data.

10:03

📉 Retail Sales Impact and Trading Strategy

The speaker emphasizes the importance of retail sales data, suggesting that it is a key market mover that many technical traders might overlook. They discuss their strategy for trading based on the data and consolidation zones, indicating that they have a clear understanding of market movements. The speaker also mentions their view on the market's potential deviation based on retail sales and how it could present trading opportunities. They conclude by discussing their approach to the day's trading, taking profits on the S&P 500, and their anticipation of further news that could provide additional trading opportunities. The speaker reiterates their readiness to adapt their strategy based on incoming data and market reactions.

Keywords

💡S&P 500

The S&P 500, or Standard & Poor's 500, is a stock market index that tracks the performance of 500 large companies listed on stock exchanges in the United States. It is considered a key indicator of the U.S. stock market's overall health and is often used as a benchmark for investment portfolios. In the script, the speaker discusses the S&P 500's movement in line with projections, indicating its relevance to market analysis and trading strategies.

💡Rally Period

A rally period in financial markets refers to a time when prices are rising or are expected to rise. It is often characterized by optimism and buying activity. The script mentions a rally period, suggesting that the speaker is discussing a market upswing and the potential for significant price movements, either breaking to new highs or experiencing a correction.

💡Consolidation Zone

In technical analysis, a consolidation zone is a price range where an asset's price oscillates with little significant progress in a particular direction. It typically follows a period of strong price movement and can indicate uncertainty or a pause before the next significant price trend. The script refers to the market moving into a high zone of consolidation, which is part of the speaker's analysis of market trends and potential future movements.

💡Basis Cut

A basis cut in finance usually refers to a reduction in interest rates, with the term 'basis point' equivalent to one hundredth of a percent. The script discusses the potential for a 50 basis point cut, which would be a significant interest rate reduction. This is a key consideration for the speaker when gauging market sentiment and predicting the Federal Reserve's actions.

💡US Retail Sales Data

US retail sales data provides insights into the total receipts of retail businesses during a specific period. It is a crucial economic indicator that reflects consumer spending patterns and can influence monetary policy decisions. The script highlights the importance of this data, as it may sway Federal Reserve decisions on interest rates and affect market expectations.

💡Anomalous

Anomalous data points are those that deviate significantly from the expected pattern or average, often prompting further investigation or adjustment. In the script, the speaker refers to anomalous retail sales data that came in 'hot,' suggesting it was unusually high and may not be representative of ongoing trends, thus requiring caution in interpreting its implications for the market.

💡FOMC

The Federal Open Market Committee (FOMC) is the monetary policy-making body of the Federal Reserve System, responsible for decisions regarding interest rates and the money supply. The script anticipates the FOMC meeting and discusses how its decisions, particularly on interest rates, can significantly impact financial markets. The speaker is preparing for potential market reactions to the FOMC's announcements.

💡Dot Plot Projections

Dot plot projections are graphical representations used by the Federal Reserve to illustrate individual policymakers' expectations for key economic variables, such as interest rates, over a specified period. The script mentions these projections as something the speaker will be analyzing, indicating their importance in understanding the Fed's future policy direction and market implications.

💡Treasury Securities (TLT)

Treasury securities, or 'Treasuries,' are debt instruments issued by the U.S. government. TLT, or the iShares 20+ Year Treasury Bond ETF, is an investment vehicle that tracks long-term U.S. Treasury bonds. The script discusses TLT in the context of investors' expectations of interest rate cuts, which can influence the value of Treasury securities. A rise in TLT typically corresponds to a fall in long-term interest rates.

💡Apple

Apple Inc. is a multinational technology company and a prominent stock on the market. In the script, the speaker provides a neutral view on Apple, discussing how its stock price can be influenced by market trends and investor sentiment. The speaker also mentions past trading strategies involving Apple, indicating how it can be a significant factor in market analysis and investment decisions.

Highlights

S&P 500 moved in line with projections, indicating market stability.

Market is in a high zone with expected consolidation this week.

Mixed market sentiment with a shift towards a 50 basis point cut expectation.

US retail sales data is critical for Federal Reserve's decision-making.

Anomalous retail sales data may indicate a need for future adjustment.

A negative retail data could pressure the Fed to consider a 50 basis point cut.

The FOMC meeting is pivotal, with most decisions already anticipated.

Markets are currently stable, but a negative retail sales report could change sentiments.

High-frequency data from retail sales could influence future GDP revisions.

S&P 500 is expected to face resistance in the upper bands.

IWM holding gains, showing market resilience.

TLT shows strength due to investor bets on a 50 basis point cut.

Apple's stock is viewed as hyper neutral, with opportunities for both short and long positions.

Apple's stock movement is closely tied to the overall market sentiment.

The FOMC meeting and retail sales data are key for market direction.

A detailed strategy will be updated following the FOMC meeting and retail sales data.

Transcripts

it is Monday September 16th and this is

our Insider access briefing so we're

going to start with the general markets

today and of course as as we always take

a look at the S&P 500 moved directly in

line with projections um now you know

the forward is I I know that when we're

in a rally period it's often far more

exciting to feel as though hey the next

move is going to be another break and

we're going to break through to highs or

we're going to have a huge correction to

lows but what's more important for me in

working with my stakeholders and of

course for for anybody to be successful

is to be able to gauge the market

accurately um certainly not looking for

what you want to see but looking for

what we will see and dead- on what we

were discussing yesterday is that we've

moved into the high Zone that we

previously saw consolidation and I

expected some consolidation this week

and it's not for nothing it's not for

the sake that we've seen this before or

that we are simply in a consolidation

Zone it's looking forward uh the markets

are still a little bit mixed there is

some sentiment lifting and moving

towards the idea of a 50o basis cut but

there's something I want to discuss here

tonight um before we sort of move on is

the idea of a potential 50 point basis

cut and so here we have the US retail

sales data and this is something you

must be familiar with because I've uh

displayed it insiders in the past uh

particularly last month coming in as hot

as we did and the market certainly had a

reaction to that it seemed to be

anomalous and uh what I discussed with

insiders was our data indicates this

this is again an anomalous piece of uh

statistical information and that we're

likely to see an adjustment at some

point in the future uh or it's simply

due to seasonality so the likelihood

here is that we Dro now the the reason

that I'm pinpointing on retail data is I

do think that will inform the feds and

sort of give them their last bit of

information uh with which to make a

decision this week it more than likely

seems that we're moving to a 25 Point

basis cut the caveat and the reason that

I marked this within our weekly calendar

and said I would revert back to it this

evening in the last night's email is

that my belief is that if we move into a

negative uh I think that would put a lot

of pressure on the feds to cut with a 50

point basis or sorry to give us a 50o

basis cut and that's because of the Gap

and the length between this FMC meeting

in the next and concerns with the

momentum of the economy I think that if

we end up anywhere closer to the median

of what we've seen through the year I

think it'll just look like we maybe had

a little bit of an anomalous jump and

we're tryling along well uh still

positive so I think if we go into the

red and I'm not talking about 0.01 uh

but if we go back into the red uh

something along the lines of what we've

seen I think that could create a little

bit of pressure and that could have a

market impact so that's something I'm

looking forward to uh tomorrow morning

and that's why I marked it on our

calendar that yes the fomc is the star

of the week and the majority of that

decision has been rendered but there

could be a little bit of a scare and I

think the reason would be that the feds

are looking at how much time there is

between this meeting and the next and

what the momentum of the economy could

be everything seems to be peachy right

now um but that certainly can change

with uh particularly a very negative

number that would suggest look July was

anomalous this is really what we're

seeing in the retail sales that shows a

slowing of the economy it's higher

frequency data uh and that could give

you a little bit of insight into future

GDP revisions or what might be coming

down the pipeline as it stands for now

yeah somewhat of a boring day uh a

little bit of a sideways day right these

are those sort of days where like I said

I don't like to get heavy into deploying

Capital um but as as noted this isn't a

surprise and you know a lot of Traders

need to be in the markets every single

day we've been very clear we've been

hyper aggressive when there's

opportunity in this period and this move

up we said look risk is on there's a lot

of targets to work after and this just

happened Time After Time After Time We

bite our time through these sideways

days and this is about as sideways as it

gets and attack so what I see on the

larger scale with the S&P 500 here

excuse me is I think we get a little bit

of resistance as we get to the upper

bands here if we're looking at um you

know about 5651 or 5652 to about 5670 I

think we that is a an area of resistance

um and I certainly think that we'll

either need a

surprise big number from retail tomorrow

or this is going to have to move into

the fomc with us so that's our view on

the overall indexes right now we remain

neutral because we don't have anything

special from retail and like I said if

retail just comes in humming along it's

nothing remarkable I don't think that

really does anything for the markets

maybe a little bit of a a quick move in

the morning um but ultimately we remain

in this Consolidated period I don't

think that you'll be able to read into

it one way or another as it pertains to

the fomc and uh and rate Cuts so let's

move along from the S&P 500 let's take a

look here iwm holding gains right a

little bit negative from the open uh but

certainly on the Gap up it's one

something we discussed yesterday um

strong from close moved into today and

really just held held the gains that we

saw in the after hours with a with a

good close so nothing that will'll

necessarily dwell on here uh but that

remains positive our projections were

212 to 216 and the idea being top end of

220 and that's if we get an agreeable

fomc uh and and certainly that still is

a potential and I think that we look to

the fomc meeting and the rate cuts for

that but it's not just the rate cut so

uh if I had to put the items in order

the rate cut likelyhood 25 basis points

unless something comes out of retail

that gives the feds a little bit of a

shock but that's not the end of the

story like I said and I will be breaking

this down for everybody as we get the

information is the Dot Plot projections

so busy day uh busy day ahead on fomc

day for me uh but I certainly will be

updating as uh as time permits and we

will build out our strategy as we always

do uh moving on on from TLT uh sorry

moving on to TLT I think this what

you're seeing here I think you're you're

seeing some strength because of because

of investors that are betting on a 50

point basis cut and I think that's a

little bit aggressive I haven't seen

that indicated from the feds uh like we

said we expected a at least a near-term

top to occur in September in the 101 to

or sorry the 100 to 105 obviously for

our P purposes the trade was taken at a

much lower level but that remains The

View right now uh and like I said you're

going to see volatile ebb and flow the

up and down it'll make you pull your

hair out if you try to track the

day-to-day action on the

tenure but today um I think that was

clear we saw the the odds shift to a

more even distribution between 25 Point

basis cut and 50 basis 50 point basis

cut and so as a result TLT for those of

you who don't know they're and are

joining us welcome TLT is the inversion

to the 10year yields so as the 10-year

yield Falls and this is an investment

vehicle idea that we've targeted several

times within insiders this year to a

great deal of success timing it hitting

it almost perfectly um as the tenure

yield Falls TLT Rises right so that's

our our play on treasuries and of course

the 10 year yield Falls as rates are

being cut and as bets change for it

right so you don't necessarily need you

certainly don't need to wait for cuts or

hikes to see changes in the tenear yield

and and of course as related to TLT uh

and today is just just more anticipation

of investors looking and saying look we

think there are better odds of a 50

point basis cut so here's the move on

TLT and moving off TLT uh one last one

for today to take a look at this is a

name where I mean I I don't know how

much more clear I can be about Apple my

view on Apple is hyper neutral uh We've

we've played Apple near perfectly taken

Apple when we move down shorted when we

move up shorted several times gone

bullish several times at this point and

what I said my most recent update remain

means is that we will get periods where

we have in flow we will get periods

where Apple makes a strong move up and

when we overextend we will short we'll

get periods where Apple gets a pullback

and where there's a bounce opportunity

we will go long but that's it's a

neutral view overall so Apple isn't one

where I'm saying hey I like it at this

point for a period of time as I do for

so many different Securities Apple's one

where I say when it gets overextended

short uh when it gets oversold by and

apple moves a great deal uh with the

markets here so Apple looking a little

bit like what we're seeing with the S&P

500 although on the lower end of that

the S&P 500 on the higher end but in its

own little triangle if you're going to

look at it from a technical standpoint

excuse me and you see a bounce off here

I'm watching

21410 um I think this will be dictated

to some extent by the fomc meeting this

week and some of the information we get

perhaps a little bit on retail tomorrow

as well uh as that is an important data

metric for Apple um and there's an

opportunity here for a breakdown if

things go negative atively like we

talked about the rally was going to

happen the S&P 500 and the inflection uh

the next inflection point will be the

fomc um it's it's looking it's leaning

towards positive right now because

things are moving along smoothly but if

Apple starts to get a break we can take

a short opportunity but I think if we

see a bounce uh we can be patient on

this one 21410 is where I'm looking for

another bounce this is just a hold on

the lows that we made today um just

looking at where apple is I think it is

neutral so if we're extended down and

the markets are looking clean uh and

there's nothing to be concerned about I

think Apple makes a bounce back up so uh

the trading the intraday the moving up

and down I I really do think that a lot

of that is just driven by the sort of

neutral shifts in and out of the stock

of course you know there was over a

month ago where we talked about the

headlines all said Burk are out the way

of moving out Warren Buffett selling

Apple it's the end of the world

everybody get out um my comments were

sort of okay I I remain neutral right it

could be that they're simply looking at

other places to deploy their capital so

you shouldn't read too much into it

right when you lionize and create these

Heroes out of out of different names you

don't understand their strategies um and

and I'm able to lend a professional lens

I'm completely neutral that doesn't mean

I'm bearish selling Apple off certainly

doesn't mean I'm buying aggressively but

an opportunity might uh Avail itself

here so that's the view going into

tomorrow we have some important news in

the morning and from that that will give

us a potential opportunities again if

it's if it's flat if it's neutral we

know the strategy today we took a couple

Targets on spy S&P 500 didn't quite pull

down to where we wanted uh we were

looking um on the high end and On The

Low End saw a little bit of action

didn't quite get down to what we were

looking for didn't quite push up to

where we wanted uh we did have of a pull

down you know we got into into the 559

so we were just pennies away from what

would have been a great bounce you see

the idea a little bit of a gap between

our entry but you certainly understand

my view here of look if we extended down

if we extended down there's an

opportunity up if you overextend up will

be moved down because it was a sideways

day um a few more sents and you would

have seen that obviously perfect bounce

so the thinking was dead on but I don't

like deploying Capital into just kind of

these shaky moves where you have to get

really tight so meaning I wouldn't

tighten up to where I'd say well let's

make it at

55685 and then you go through this this

is the sort of price action that we were

seeing and that was expected so uh we

know what's on Deck I wanted to discuss

the importance of retail I don't think

that anyone's looking at that I think

that a lot of technical traders are sort

of seeing the consolidation Zone that

we're moving in but they didn't really

forecast the same way that we have um we

understood why we're going to move into

that consolidation why we saw that

correction on the market why we might

break up why we might break down um and

should there be a a deviation or uh

substantive information on retail sales

we understand in advance why that's

going to move the market and that will

allow us that will inform our decision

and opportunities and trade ideas to

jump in and move with momentum uh

perhaps when others Within in the market

are dismissing it so that's our update

for tonight we will have much more to

come