Will More Stimulus Save the Economy?
Futures traded sideways again in the overnight session, and have been stuck in a tight range since last week Friday, when we saw a nasty payrolls print. This morning's jobless claims came in ugly with 965K new claims, the highest level since August, and 5.271MM continuing claims, a rare rise from last weeks 5.072MM. Import and Export prices came in higher than expected at 0.9% vs 0.2% prior, and 1.1% vs. 0.7% prior, respectively.
The Biden Administration will be releasing it's economic plan today, along with a new stimulus proposal, which is rumoured to be "in the Trillions." The "leaked" number is apparently $2 Trillion, which as far as I'm concerned may have a positive impact on sentiment, but is a drop in the GDP bucket. I have no doubt in my mind that unless inflation takes off like a rocket, we're going to see a massive disappointment in GDP. Perhaps the ultra-leveraged robinhood crowd will use this new money to take the S&P to 4000, where they'll have their hand out again for another round of stimulus. I've never seen institutionalized ponzi schemes like this before. But, hey, if the FED does it, why can't everyone, right? What a farce.
SPY is sitting just above the 21EMA on the hourly, which has provided strong support over the past week or so, but it would appear that if the 378 level breaks, we may retest the lower band of the white channel, which is sitting around 368. That's my target for the end of the week, and I'll be watching Vix for signs of continued support at the lower ascending trendline, just as we saw yesterday after we fell to a 21 handle. Having said that, the all-time high is an arms length away, and with Biden about to drop a bombshell proposal with Trillions in free money, markets may very well make new high's before we see any notable correction. Risk protection has never been cheaper imo, so trade accordingly.
Thanks for your time today guys! If you enjoyed the analysis, join us over at the Hedge of the World website (link in profile), for our live daily play-by-play of markets.
The Biden Administration will be releasing it's economic plan today, along with a new stimulus proposal, which is rumoured to be "in the Trillions." The "leaked" number is apparently $2 Trillion, which as far as I'm concerned may have a positive impact on sentiment, but is a drop in the GDP bucket. I have no doubt in my mind that unless inflation takes off like a rocket, we're going to see a massive disappointment in GDP. Perhaps the ultra-leveraged robinhood crowd will use this new money to take the S&P to 4000, where they'll have their hand out again for another round of stimulus. I've never seen institutionalized ponzi schemes like this before. But, hey, if the FED does it, why can't everyone, right? What a farce.
SPY is sitting just above the 21EMA on the hourly, which has provided strong support over the past week or so, but it would appear that if the 378 level breaks, we may retest the lower band of the white channel, which is sitting around 368. That's my target for the end of the week, and I'll be watching Vix for signs of continued support at the lower ascending trendline, just as we saw yesterday after we fell to a 21 handle. Having said that, the all-time high is an arms length away, and with Biden about to drop a bombshell proposal with Trillions in free money, markets may very well make new high's before we see any notable correction. Risk protection has never been cheaper imo, so trade accordingly.
Thanks for your time today guys! If you enjoyed the analysis, join us over at the Hedge of the World website (link in profile), for our live daily play-by-play of markets.
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