Trading Week of Aug 22 – Aug 26

SPY is down to $416 at the start of trading hours. What caused it to go down?

Economic Factors

• Fed Meeting: Sept: 26-27
• US Treasury: 2.991%
• Yield Curve: downward slope
• Inflation rate: 8.52%
• US Dollar Index: 108.71
• Mortgage Rates: 3.75% – 5.00%
• Unemployment Rate: 3.5%
• Crude Oil: 86.86%
• SPY: $416
• VIX: 23.12

The VIX went up from 19 to 23 from last week and the SPY went down from $430 to $416 from last week. Are those two correlated?

Catalyst events

Jerome Powell will speak on Friday on Jackson Hole, Wyoming. What will he talk about?

Fun fact: according to this Jerome Powell makes $200k per year.

Jerome Powell will talk about the economic outlook and could give an idea on how much the borrowing rates will be at the next Fed meeting.

News

Fed sees interest rate hikes continuing until inflation eases substantially, minutes show

The Fed had said last that they would look at market data to determine how much to do a rate hike for and since inflation hasn’t gone down considerably the Fed said in minutes that they won’t decrease the rate hike and will keep going until inflation has gone down a considerable amount.

Seems like the market was expecting a lower rate hike or for the Fed to say they’ll start pulling back on rate hikes, which is what caused the recent rally. But with the minutes confirming strong rate hikes, the market didn’t respond well to it.

Biden signs Inflation Reduction Act into law, setting 15% minimum corporate tax rate

I’m not sure if this affects inflation going or not going down. It doesn’t seem to be specific to market but the title made me think it was important.

The Market’s Consolidation Is Not Over

The stock market started going negative on Friday (Wednesday the minutes came out).

It’s saying Bloomberg evaluates SPY at about $230 per share, which is super low so I’m not sure if I’m understanding this correctly.

Zoom’s Post-Pandemic Slowdown Keeps Stock in Check

Zoom definitely had a big rally during the pandemic but now that it’s coming to an end, it’s starting to see a crash down.

My question is if it’s going back to the level it was before the pandemic, if it’s going lower, or higher?

After checking the chart, it went up to $588 at its peak, but the pre-pandemic levels were at about $70ish. It’s still higher than pre-pandemic levels at the moment.

The stock can move in either direction after earnings today.

It’s also saying that a general weakening in digital advertisement has affected giants like Alphabet.

Dow Jones Drops After Stock Market Sell-Off

There are some big earnings this week, especially from ZM, who is very volatile at the moment because of their previous bad earnings as they see a dropoff from pandemic levels.

This has been seen in other big stocks like NFLX.

The next few days will be key to determine where the market will be headed. At the end the article suggests that a change in trend doesn’t necessarily mean a bad thing for the market.

Dow Slides, AMC Stock Plunges—and What Else Is Happening in the Stock Market Today

It’s reaffirming that the expectation of a slower rate hike from last meeting is what caused the rally and when seeing the Fed will continue with its rate hike trend it took the market by surprise.

It’s also saying that with the dollar gaining strength, that’s affecting the bond market I believe.

The market is now expecting the opposite outcome of a rally.

U.S. stocks open lower, extending last week’s decline

Maybe the market got ahead of itself in thinking the Fed would have lower rate hikes.

Stocks Open Lower on Economic Worries

Stocks are down because of report of not slowing down rate hikes.

Some investors believe inflation has peaked.

There will be a meeting in Jackson Hole that’ll determine the decision Jerome Powell will take. I’m assuming this is referring to the next Fed meeting.

BitCoin’s price dropped and it seems crypto currencies’ price is heavily determined by market sentiment.

Stock market live news updates: Stocks under pressure, Nasdaq falls 2%

It’s saying the price of Crude Oil has dropped, not from last week but in general from their all time highs.

The 10 year yield has also risen.

Crypto saw a dropped alongside stocks, as they’ve been going up together with the rally.

The meme stock AMC dropped a lot apparently simply because it wants to change its ticker to APE.

It seems this news of AMC wanting to change its name to APE is what drove BBBY to rise so high. One of the primary non-Fed related stock movements.

What caused BBBY to go down was the news that Ryan Cohen sold 11.8% of the struggling retailer.

Stocks Keep Getting Hit as 10-Year Yield Tops 3%: Markets Wrap

The drop in the market was caused by investors embracing for the speech Jerome Powell will give on Friday in Jackson Hole, Wyoming.

Tech shares are underperforming as US Treasury reaches 3%.

The VIX rose, and the higher risk caused more movement in meme-stocks.

There will be a new policy announcement in Wyoming’s Grand Teton mountains, a common place where the Fed has used to make announcements.

In this meeting Jerome Powell may touch the subject of rate hikes but will stop short of saying by how much they’ll raise it.

But it seems there’s a general sentiment that there will be strong rate hikes and/or not quick rate cuts.

Stock Traders Shun Risky Bets as Rally Hits a Wall: Markets Wrap

AmeriCorp believes S&P 500 will drop by 7% last week.

Morgan Stanley Wealth Management says stocks are overbought.

The price of gold dropped, stronger yield bonds and higher bond yields are bad for bullions. The price of oil slumped.

Dow slumps 600 points Monday to wrap worst day since June as summer rally fades

This happened because of the fear of aggressive rate hikes coming up. All major indexes dropped considerably.

This will be a volatile trading week due to Jerome Powell’s speech on Friday.

The drop is a way of the market saying the Fed will continue on its aggressive rate hike.

Tech stocks are declining.

Builder Toll Steps Up Incentives in Shift to Buyer’s Market

Says it’s mostly a buyer’s market instead of a seller’s market right now.

Stocks hit session lows, with the Dow losing 700 points as Powell’s warnings rattle Wall Street

This was mainly because Jerome Powell said it won’t back down from raising rate hikes to bring down inflation.

Investors will now weigh higher rates in their investment strategies.

The major averages are on their second week of being down.

Historical records show that pulling back on rate hikes won’t be good for the economy in the long term and that it’s a necessary step.

Powell warns of ‘some pain’ ahead as the Fed fights to bring down inflation

Powell plans the Fed will keep raising rate hikes as first announced to fight inflation.

Inflation is still running the highest it has been in 40 years.

Inflation is a concern because it’s not showing any signs of declining.

Powell said it’s not taking into account the past two months of data because even tho it’s showing a sign of slowing down, it’s not long enough to make a decision that inflation will slow down.

Although Powell says they will make a decision based on the data, unless the data shows a strong decline (inflation down by half) Powell might not take into consideration just a month of data and keep with its long-term plan of bringing down inflation.

Powell is looking at data from 40 years ago to learn how to handle the current inflation.

“Rational inattention” is on Powell’s mind.

Dow skids 750 points, putting it on pace for worst daily drop since mid-June

Powell will keep fighting inflation strong until the cost of living (is this inflation?) has been brought back down to 2%

S&P 500 Heads Toward Worst Day Since Mid-June: Markets Wrap

The Fed will continue with its rate hikes strong to fight inflation.

Powell stated an “unusually large” rate hike will happen at the next Fed meeting.

Dow Drops After Powell’s Jackson Hole Speech — and What Else Is Happening in the Stock Market Today

Powell made hawkish remarks about strong rate hikes so the stock market sold off.

The stock market was surprised and didn’t get it what it wanted. Strong rate hikes are opposite of what the market had expected, which means the summer rally might not keep going.

About 60% of investors now think there’ll be a 75 basis-point rate hike.

Until rates has risen to 4%, the Fed will keep rising rate strongly.

Powell did say there’s a possibility of a 50 basis-point rate hike, leaving some optimism and saving the market from dropping much lower.

Questions

• Why is the US Dollar Index affecting the market and how?
• A downward yield curve signals lower interest rates in the near future, right? Is that why investors were expecting lower rate hikes coming up?
• What is the main benefit of Trade Ideas vs. using scanners from TW or Webull?
• About day trading:
  • once an alert comes in, what to check about the stock before entering?
  • I see the scan is for 5 minutes, but one stock moved a little over a dollar in less than 5 minutes. My question is, do you enter trades that are just a few minutes long?
  • if an alert comes in 5 minutes before market close on Friday, do you stay in the trade for a few days?
  • Some stocks just keep going up, but they all seem to have the same format of a few green candles with a high, but they keep going up.

• Do I wait until the end of the day to close the positions?
• Do you use Trade-Ideas Stock Races chart?
• Do you enter the TradeRoom in Trade-Ideas?
• DE was the only stock that went down considerably (proportionally), how many red candles do you wait before entering? Do you enter stocks where you’ll only make less than $100?

• MRO
• DE
• OVV
• VET