9.16.24 Retail Impact, $SPY, $AAPL
Summary
TLDRIn 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
- π The S&P 500 is in line with market projections, indicating a period of consolidation.
- π There's a potential for a 50 basis point interest rate cut by the Fed, which could impact market sentiment.
- πΌ US retail sales data is crucial for informing the Fed's decision-making and could influence the economy's momentum.
- π The market is currently mixed, with some sentiment lifting towards a possible 50 basis point cut.
- π The speaker advises to gauge the market accurately without bias, focusing on what the data indicates rather than personal expectations.
- π The FOMC meeting is highlighted as a significant event that could determine the market's next move.
- π± The speaker remains neutral on Apple's stock, suggesting opportunities for both shorting and going long depending on market conditions.
- πΉ 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.
- π« The speaker warns against deploying capital heavily during sideways market days, advocating for patience and strategic trading.
- π 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
π 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.
π 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.
π 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.
Mindmap
Keywords
π‘S&P 500
π‘Rally Period
π‘Consolidation Zone
π‘Basis Cut
π‘US Retail Sales Data
π‘Anomalous
π‘FOMC
π‘Dot Plot Projections
π‘Treasury Securities (TLT)
π‘Apple
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
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