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The Morning Show - Monday 24 July

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Welcome to a new week!

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Opex Unwinding And FOMC Spooling Up

As we head into the new week, there are two major forces at work in the equity indices.  

  • The first is that market-maker option hedges have to be unwound following July opex on Friday.  This can be unpredictable but it's likely a weakening influence on the indices as long hedges are sold.  We won't see a great deal of this until regular market hours get underway.
  • The second is that Wednesday sees FOMC and another rate decision. Expectations are for a 25bps hike and then language indicating a pause as regards any further increases.  FOMC events tend to be short term volatile and there are profits to be had on the short and long side if one is fleet of foot.  If not, hedging going into FOMC may be wise.   We talk about this in today's Morning Show.

So now, for our paying members only, here's today's video where we walk through our long- and short-term outlook for the Nasdaq, the S&P500, the Dow, the Russell 2000 and the 10-Year yield.  If you've yet to become a paying member, you can sign up right here.  If you're already in the Inner Circle, just scroll right down to start playing the video.