FEDERAL RESERVE CHAIRMAN JEROME POWELL HAS A SPEECH TOMORROW THAT WILL SURELY MOVE MARKETS
All investors around the world will be watching Jerome Powell's speech tomorrow.
Check the link above to see how I predicted the short term bounce off of a previous consolidation zone on the SPY. The link will give you a better description, but I have the pictures from the link illustrating the bounce off of a previous consolidation zone directly below. The link also has a great explanation on the correlation of all the major traded securities within equity, forex, commodity, corporate credit, and cryptocurrency markets.
The billish candlesticks from yesterday and today are showing a bounce off this previous consolidation zone. For this bullish bounce to continue then it will absolutely depend on what Jerome Powell says tomorrow in his yearly speech at the Jackson Hole Symposium. Jerome Powell will be speaking about inflation, interest rates, and the Federal Reserve's policy moving forward.
If Jerome Powell raises interest rates at higher than expected pace then it should impact equity markets negatively. If he raises interest rates at a lesser amount than expected then it should be positive for equity markets.
Typically when the Federal Reserve chairman gives a speech the market has really big moves. I'm expecting a big move this time as well. But I do not know which direction the market will decide on. That is why I purchased a strangle options spread so I can profit off of the big move in either direction. Here is how a strangle works.
Strangle Options Spread
A strangle options play is something you would want to utilize when you are expecting a big move in the markets, but you do not know which direction the move will be. Basically you would purchase an out of the money call and an out of the money put. For a strangle to make profit there must be a big move in either direction so the profit from the winning contract will be more than enough money to offset the losses from the losing contract. But if the move is not big enough in either direction then my strangle will lose big time. I've illustrated how a strangle option spread works in the two charts below.
A strangle options play is something you would want to utilize when you are expecting a big move in the markets, but you do not know which direction the move will be. Basically you would purchase an out of the money call and an out of the money put. For a strangle to make profit there must be a big move in either direction so the profit from the winning contract will be more than enough money to offset the losses from the losing contract. But if the move is not big enough in either direction then my strangle will lose big time. I've illustrated how a strangle option spread works in the two charts below.
So will the markets turn bullish or bearish after Jerome Powell gives his speech tomorrow?
$SPDR S&P 500 ETF(SPY.US$ $SPDR Dow Jones Industrial Average Trust(DIA.US$ $Invesco QQQ Trust(QQQ.US$ $iShares Russell 2000 ETF(IWM.US$ $VIX Index Futures(MAY4)(VXmain.US$ $Powershares Exchange Traded Fd Tst Db Us Dollar Index Bullish Fund Etf(UUP.US$ $iShares 20+ Year Treasury Bond ETF(TLT.US$ $SPDR Gold ETF(GLD.US$ $iShares Silver Trust(SLV.US$ $Crude Oil Futures(JUN4)(CLmain.US$ $Ishares Iboxx $ High Yield Corporate Bond Etf(HYG.US$ $Ishares Iboxx $ Investment Grade Corporate Bond Etf(LQD.US$ $Copper Futures(MAY4)(HGmain.US$
$BABA-SW(09988.HK$ $NIO Inc(NIO.US$ $NIO Inc. USD OV(NIO.SG$ $NIO-SW(09866.HK$ $Tencent(TCEHY.US$ $BILIBILI-W(09626.HK$ $Bilibili(BILI.US$ $XPeng(XPEV.US$ $XPENG-W(09868.HK$ $Li Auto(LI.US$ $MEITUAN-W(03690.HK$ $Meituan ADR(MPNGY.US$ $BYD COMPANY(01211.HK$ $Baidu(BIDU.US$ $BIDU-SW(09888.HK$ $Hang Seng Index(800000.HK$ $CSI 300 Index(000300.SH$ $SSE Composite Index(000001.SH$ $S&P/ASX 200(.XJO.AU$ $FTSE Singapore Straits Time Index(.STI.SG$ $SPDR S&P 500 ETF(SPY.US$ $JD.com(JD.US$ $JD-SW(09618.HK$ $PDD Holdings(PDD.US$ $BYD COMPANY(01211.HK$
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iamiam : I think it rockets up off something he says early, then crashes down as he talks
moneyworkhard : Better not to say anything... At least can see greens
Violets : I think we read today and then we have a reversal before his speech in a small rally. the question is what happens Monday? lately the day after he speaks the following day is sideways or semi bullish. I just don't see bullish continuing next week. definitely could be wrong LOL
Stockfishing : Nothing makes sense. M1 still at all time high, we are living in a bubble of lies.
SpyderCallOP Stockfishing: the market rarely makes sense
SpyderCallOP Violets: I think we are in for a correction of this rally next week. I could be wrong though
Violets : boy was I wrong about the reversal on friday. I could see by 10:00 it was going to drop all day long but this is the first time after he has spoken that the market did not pump up in support of him. what a day! I know you did well and I'm happy for you! I am naturally a bear so always do better on the downtrend days. thanks for commenting always looking for your post because I always learn from you.
Violets SpyderCallOP: agree. maybe around 370 will be the bottom
SpyderCallOP Violets: that is a solid support. if we dip below that then o am watching the 360 and 340 levels.... I read several articles that were giving justifications for SPY reaching 3000
Violets SpyderCallOP: wow. look forward to your posts hopefully Sunday LOL
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