Market On Open - Wednesday 13 March
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Just Messing With Your Head Before FOMC Now
by Alex King
I am going to quote here from yesterday’s edition of RollsRoyce’s Darkpool Trading, a Substack that you can sign up for here.
"My belief is that charts make the news, not the other way around. I actually trade much better with peripheral knowledge of the news. Nice to know that an event might make the algo’s go crazy for a few minutes. Those few minutes might give me an exit or entry right where I want. Then, the boys at mission control do what they were going to do anyway."
I couldn’t put it better myself.
Right now we are in the glide path towards opex (Friday) and then FOMC (March 19-20). Really and truly no new news is likely to come out of these events, which is to say nothing that is news to Big Money. Big Money already knows how option dealer hedging is positioned, the unwinding of which will drive the equity market post opex; and it already knows more or less what Chairman Powell is going to say on from the balcony of the winter palace after opex. You may not know these things, I may not know these things, but Big Money knows these things. And in all likelihood not in any way that could ever be deemed any kind of securities fraud. (Though I do love Matt Levine for this; he has a way of finding that, in the end, everything is securities fraud if you only think about it for long enough. Costco plans to raise its prices next month and doesn’t tell the SEC? Securities fraud. Etc). It is literally Big Money’s most important job to know these things. Buying and selling securities, that’s just the day job, the grunts and/or machines can do that. The real work of the bigs is working this stuff out ahead of time.
So, from now until FOMC we can say is a time of just messing about, at best to confuse the civilians and at worst to take money off of any particular citizen-investor fool enough to try to trade the market whirligig during this period. Bigs already know what they are going to do come March 21. As always, anyone not called Bill Ackman or other members of the Federal Reserve advisory board can do themselves a big favor by simply watching price and reacting. Anticipating which way bigs will do? Best way to give them your money. Reacting? Low stress and more likely correct.
Below we dive into our usual charts where we walk through the S&P500, the Dow, the Russell 2000, the Nasdaq-100, and then a clutch of specialist ETFs, being SOXX / SOXL (semiconductor), FNGU (tech majors) and TECL (also tech majors).