Notable levels from yesterdays session (Stocks & Futures)
4192 OVN high on Emini which was a level provided in the Weekly Outlook. Read what was said below.
While the rally fizzled out shortly after breaking above 4200s, the reclaim below 4192 VAH was held for a sell all the way down nearly touching 4095 VAL all in one session.
NASDAQ Short level 13310 was Cash Session HOD selling down a total of 200 handles! Later snapping below long level continuing down trend which we took two pieces of on the way down with a great 13159 long level given before spiking EOD to 13220s.
Not only did we call this on NQ but we gave 4120 to 4140 Emini which hit perfect into the close. While giving analysis on Futures I called two $SPX Calls that ended up moving up +200% & +100%.
Spent much more time on data analysis to prepare for this FOMC meeting. If you want to recap the levels from yesterday you can check the updates inside the telegram or go back and match the levels with yesterdays session.
Recap of yesterdays events
Are we in line for a credit crunch?
First, we must define what a credit crunch is and if we are meeting the parameters for one.
A credit crunch is when Banks become fearful of giving out loans as they expect there is a chance the borrower may default. FED will then increase interest rates to bring a safeguard to the banks giving out the loans. This will mainly affect individuals and businesses that were previously obtaining loans to finance large purchases or even expand operations. With the higher rates the balance on the loan is not able to be met and we see a major decline in loans.
2008 Financial Crisis is not far fetched at all to compare to days conditions but it still has more to develop.
Why?
In 2008 many big US Banks were giving out Subprime loans like it was candy. This totally steps in front of the FED with interest rate hikes as the goal is to simply kill demand. Yet these loans allow the consumers even with bad credit, sometimes terrible credit, to acquire the loan even with no history of consistent on time payments.
Think about this, these banks are fine with giving out subprime loans as the profit for the business skyrockets. Anyone accepting the terms of these loans are paying far higher rates than say an average loan. The American dream of owning a home does have a part to do with this as most want to own a house and are now given options.
If these subprime loans were good to have in our system, there would be no need to change the name to “non-prime” loans. As if changing the name and not the conditions will make this time better than the last.
Read below, quite shocking!
JOLTS: job openings 9.590MM, Exp. 9.736MM, Last 9.931MM
Increased: Educational Services & Construction
Decreased: Utilities, Warehousing, Transportation, Accommodation & Food Services
Job openings decreased showing a decline in economic growth which will help in bringing inflation down as spending is expected to take a hit.
Events
Earnings
