Market crash

@wallstreetcappers

 Of course I say no....the FED is playing a chess game on multiple levels for multiple central banks. 

Yes, they have been playing this CB game for quite some time and that will continue as it has been working.  If you read JPOW's statement he specifically outlines their current outlook on the two long standing mandates of "lower inflation" and "unemployment / jobs".  He characterized inflation as being "tamed" and this move more precautionary for their jobs mandate.  "The economy is fine" is what they always say.  I wouldn't characterize the 50 bips cut due to the general "economy" but it is a reflection of what many consider a previous policy mistake.  You said it yourself, "they moved too high too fast and used old theory".  

Inflation is not "tamed".  If history is any lesson we will be looking at inflation rates back back upwards of 8% within the next 2-3 years.  Obviously a lot can happen in that time frame but the CB's will continue to play the game that has been working for them thus far.  Let's see what the BOJ does rate wise here with their statement of monetary policy due out tomorrow. 

It was also interesting Powell dipped his toes into the immigration discussion....

"Powell responded by indicating that the influx of immigrants has contributed to the rise in unemployment, alongside a slower hiring rate.

@wallstreetcappers

 Of course I say no....the FED is playing a chess game on multiple levels for multiple central banks. 

Yes, they have been playing this CB game for quite some time and that will continue as it has been working.  If you read JPOW's statement he specifically outlines their current outlook on the two long standing mandates of "lower inflation" and "unemployment / jobs".  He characterized inflation as being "tamed" and this move more precautionary for their jobs mandate.  "The economy is fine" is what they always say.  I wouldn't characterize the 50 bips cut due to the general "economy" but it is a reflection of what many consider a previous policy mistake.  You said it yourself, "they moved too high too fast and used old theory".  

Inflation is not "tamed".  If history is any lesson we will be looking at inflation rates back back upwards of 8% within the next 2-3 years.  Obviously a lot can happen in that time frame but the CB's will continue to play the game that has been working for them thus far.  Let's see what the BOJ does rate wise here with their statement of monetary policy due out tomorrow. 

It was also interesting Powell dipped his toes into the immigration discussion....

"Powell responded by indicating that the influx of immigrants has contributed to the rise in unemployment, alongside a slower hiring rate.

@wallstreetcappers

 I think it has zero to do with jobs 

You think it has zero to do with jobs even though JPOW told you the exact opposite ??  

Take at look at this chart:

https://fred.stlouisfed.org/series/UNRATE

Now compare it to the previous times they cut 50 bips 

https://x.com/chesterchy1/status/1836489195868569834

Notice anything?  Care to revise your statement "it has nothing to do with jobs" ?? 

@kcblitzkrieg

 Nah I stick with my thesis and I gave my reasons why. The jobs market alone does not justify a 50bps move. Look at the FRED chart on government interest payments and there is a better answer. The FED to me tried to hammer inflation out by raising rates hot and fast, too high and they thought they could make the splash and then ease out when inflation quickly exited. They were wrong in their blunt tool usage, this isnt Volcker era, the economy is more complex and banks are not taking FED cash, lending and so on and so on, the money multiplier that worked for Volcker did not work for ANY of the FED dopes for the last 20 years. They tried expanding policy to raise inflation, that failed, they tried choking monetary policy to end inflation quickly, that failed. 

The problem is the FED has blunt tools that are exploited by capitalist banks and private equity/hedgies/HFT firms all sorts of outfits slurp off FED funds and exploit the outdated, ineffective tools they have. They had to reverse course because it was harming governments (plural) and the USD was too hot, their experiment was very damaging and they have little to no tools to impact inflation or employment outside the margin.

Listening to the JP spin does not mean what he is selling is the truth OR accurate. If rates were at 2% would the FED have cut 50bps due to the current job market? Of course not.

JPOW nor I ever said it has to do with "the job markets alone".  It was very clearly stated.  There has been ONE DUAL mandate.  Inflation and jobs.  JPOW ruled out inflation and specifically said JOBS.  Now I agree with you that it is not "job market alone" but to completely dismiss it without the acknowledgment of this simple clearly stated fact is just silly.  

I agree with you on everything else you stated above.  

You also skipped over the entire JPOW bit on immigration influences.  Why did you do this?  

@kcblitzkrieg

Because JP is not in the government, I really spend zero time listening to anything these guys say, they are all crooked bots IMO..ever since Greenspam I've tuned them out and I am better for it. JP has few tools and the FED does a poor job at all of their mandates, the mandate of most value that is not discussed is their dreaded lack of control over the leveraged capitalist mega banks. The fact the FED allows and blesses the way banks exploit FED funds and overnight REPOS to me means they have zero mandates and zero added value to the economy. I think their mandates are on paper the inflation and jobs, well they suck at those mandates so what good are they if their tools have so little impact?

Their mandates that are both unstated and under analyzed are to facilitate big banks, to support the global FED cabal and to retain control over monetary policy. Those are their real mandates, the other stuff is rice paper garbage. Big banks control the FED, their value to the economy is misguided, dishonest and deceptive.

@BigGame90

 Do not know if you kept up with FAS or not since back then.

It is now up a tad over 17% and the S&P is up just under 3%.

I expect it to continue on this path upward as they continue to drop the interest rates.

@BigGame90 

@Raiders22

Big jump far FAS today.  I am not sure if you kept an eye on this or not.

Since we talked about it FAS is now up 24% and SPY is up 5%.

It will be interesting to see what happens with the FED meeting tomorrow.  I think a 25 cut is baked in.  I still expect this to continue to rally through at least the 1st quarter.

I have solid stops in place to lock in profits.

But is does look very much like this sector will be one that will continue to rally for some time.

@Raiders22

 Nice hit Raiders! 

I'm currently riding smci puts and in the near future, I'll lock in some meta, nvda and spy puts for ~1.5 years out if we get one more rate cut. 

@BigGame90

   I got META puts last week.  But have very longterm calls on SMCI.  Just shares on NVDA.  But I also have had a lot in SMH, which is a semiconductor ETF.

But it will be interesting with the AI stuff to keep a close eye on these for sure.  PLTR and SOFI are big runners for me right now.

@Raiders22

 It sure will be interesting. Always fascinating when the accountant resigns over financial statements and integrity. But hey, maybe the books weren't cooked, right?  

@BigGame90

 It is.  BUT can they really be held down that long in a sector that is going to run?

It will be something to watch.

@BigGame90

 May be some opportunities today in the next couple of hours...

@Raiders22

 Is the sector going to run, or has it already ran? I guess that's the ultimate question. If it's already ran, did it run because of cooked books? 

Keeping an eye and waiting for Jpow to bring the volatility.   Will be playing the opposite of the first big move and will get in and out quick as there will likely be multiple big moves quickly. 

@BigGame90

@Raiders22

 I went poots 

@BigGame90

 I did before he came out.  Right before he finishes I will switch to calls

@Raiders22

 Seems to be the way the market was going today. brrrrrrrr

@BigGame90

 Some of these nuts asking the questions I think are trying to manipulate the market.

Ask him a question knowing he has to use the words 'stong' 'weak' 'healthy' 'expected' etc.

Now she asking him about resigning!

Closing it out strong.  "we are performing better than our peers'.  

Then guy trick him into saying 'unexpected'.

'That next year may be even better than this year'

Finishing solid! 

Some of the questions are kind of ridiculous. They do try to twist questions to get him to give up more info. I do believe I'm seeing him actively trying to hold back and stick to the main talking points. I feel like the 2% target is getting used less because it's not going to happen anytime soon. 

"No"       "No"    

@BigGame90

 Big chance for today to have some good opportunities right after lunch until close. 

Also do not know if you have kept up with FAS or not since back then.

Since then FAS is up +23.7% and SPY is up +6.7%.

I look for this to continue for a bit more.  I think everything I said before the previous cuts applies now.  The play was initially anticipating three cuts and it looks like we will see that.  So, I look for this sector to still outperform the overall market going into the new year.  I have also been adding chunks to SOFI positions (I have the stock and far out options) for this reason and because of their niche and novel moves.

@Raiders22

 what are you playing today? I might sit today out as I'll be busy and might not be able to watch/listen. I played some tsla calls early in the week and had a nice 1.25x return on some calls but didn't want to hold them going into this afternoon. 

@BigGame90

 I will start small with QQQ, SPY puts and then see how it spikes.

Good for you! 

Yeah, I unloaded TSLA after 458ish hit because that was a key number for me.  Wish I had held while it blew past that.  So, now will wait and see if it bounce back near there.

Right before 11:00 I loaded up on SOFI and SMCI calls also.  I think those have great potential today and maybe will hold a day or two.

See what Uncle Jerome has to say...

@Raiders22

 Going to cut .25 which is odd. If the economy is doing as well as we've been gaslit to believe, fed wouldn't need to cut rates to stimulate the economy. Seems like we're being told/shown one thing when the opposite is really happening. I think you might be right with the puts today. Either way, it's likely going to spike up and down so you should be able to get in and out with profit on both ends, buying the dip and selling the rip.