By: Tom Gentile
on November 3rd, 2022
Here we are one day removed from the 4th 75-basis point rate hike in a row.
If one was curious whether the decision and the commentary from Fe Chair Powell that followed would help the markets, today’s price action showed that did not happen.
One of the key statements we feel is adding to the weak price action today, or what we are calling the post-Fed hangover, is the statement that the amount of the rate hikes are not as important as the pace of the hikes.
This gives indication that more rate hikes are due to come our way even after the December rate hike.
So, if you thought the Fed was going to go away for awhile after the December rate hike decision that may not be the case and we should expect more appearances from the in the beginning months for 2023.
Will the Pending Jobs Report Cure this Market
The jobs data due out tomorrow could be the elixir the markets needs to get it going again or continue to spur the markets higher from the October low.
Normally one would think more people going aback to work and having jobs would be a good thing for the markets and the economy overall.
The funky thing is a jobs number that comes in too hot may not be exactly what the Fed wants to see right now as they are trying to combat inflation and do so without triggering a recession.
We have the jobs data out tomorrow and then we have to pay attention to the October consumer price index report (CPI) due out next week.
Earnings are still being announced and one key thing to remember for options traders, at least those that learn from me, and my team of instructors is to strongly consider getting out of any open options trades prior to the earnings being released.
There may be a time or two where an option sees a pop in profits by being held when the earnings comes out, but there are more often than not, it seems, times where a profitable position blows up and loses those profits or any more paced on that option trade because of the numbers the company reports.
It is too risky a game to try and hold options over earnings unless you have been taught a strategy on how and when to consider that *and have the historical data to back up why one would do so).
Let’s see what the jobs data shows us tomorrow and we will talk at the end of the trading day.
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