By: Tom Gentile
on November 8th, 2023
Originally published via our newsletter previously. Subscribe for early access!
The news of the day was that the Fed was to announce whether or not they were going to raise interest rates.
Though there was pretty much a ‘zero’ chance they would raise, there is always the anticipation of what Chairman Powell was going to say regarding the Fed’s stance on interest rates and whether they were going to maintain their ‘higher for longer’ stance.
Though that may still be the case they decided to continue to pause their rate hikes, this being the second time in a row, (after 11 consecutive hikes), they decided the course of action was to be that of ‘no action’.
There is a lot of dialogue being paid to the fact Chairman Powell’s dialogue when he addressed the media was that he basically had no change in dialogue from the last time they decide to not raise rates.
To some, the fact he said the same thing, maybe changing or adding in a word here or there, intimates the Fed is done raising rates for now. According to data from the CME Group we may not see another rate hike util maybe June 2024.
— Tom Gentile
C1P: Chief 1-Percenter
Market in Focus DIA: aka the DIAmonds. SPDR Dow Jones Industrial Average ETF Trust
The 4th and 3rd days back formed what can be considered a Bull Sash pattern: A Japanese Candle pattern that signals a possible bullish reversal after a downtrend. The key for that pattern, as it is with all of them, is it needs to follow through. This market got that even before Fed Day, today.
We need to see this continue to follow through, but for now $325 looks like support for DIA.
Tools and Observations
This week will be short Tools and Observations section as we just finished up a day in the markets where we had yet another, what we call, ‘Fed Day’.
A day in which we get the Fed’s decision on interest rates and the follow up meeting with the press and Fed commentary from Fed Chairman Powell.
He really didn’t say much different from the last time, so not much to discuss here in terns of what that means for us as option traders.
I highlighted the possible bullish reversal pattern in the DIA earlier in this educational newsletter and a similar pattern is there for the SPY, where the QQQ had a bullish kicker pattern around the same time frame.
The way it looks is the equities markets have formed a bottom for now. It has now had a couple of days follow through and if one believes it can follow through to the upside even more then let’s take a look at the Money Calendar to get a bead on ‘seasonal’ bullish patterns.
Let’s also note November is typically one of the most bullish months of the year.
Dating back to 1960, out the months of September to December, November has been the most bullish.
December is also a bullish month. Even though, maybe not as bullish as November the last two months might be a reprieve for the bulls having gone through three consecutive bearish months in a row.
This is the look of the Calendar view of the Bullish / Bearish Sentiment.
I will also include an image of the list of all the securities in the list with a start date of November 1 that have traded higher from todays start date to a later date 10 of the past 10 years.
Here is the list of those securities with a start date of today that have traded higher 10 of the past 10 (100% of the time they have gone higher over the date ranges from the Money Calendar data).
— Tom Gentile
C1P: Chief 1-Percenter
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