Post Fed, markets legged lower amidst the clamor of perhaps a more hawkish Fed than we expected. This is all bullshit, reasons to sell and behave badly. The tape was already ruined by $GOOGL and this is only exacerbating an already bad situation. Whether this is a one off event or the beginning of something special remains to be seen.
I have heavily hedged at 17%, actually making me NET SHORT. I am not disillusioned to the idea that this initial move lower may be false. Nevertheless, I am not in a position to gamble, as I am intent to keep my gains — now just +22bips for the session.
I have ideas for the end of session and will try to turn those ideas into action, in spite of the headwinds.
Breadth is at 40%, not terrible but not good. For the month, small caps are down 2% while the NASDAQ is up 2%, continuing a trend that persisted all last year up until the great small capped breakout in November.
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I watched the Fed presser. What a bunch of self-interested slimeball ‘journalists’ asking only questions that might sneak-trap Powell into taking aggressive loosening actions that might just expand their personal portfolios with no other considerations on their mind. Why can’t we get someone to ask him: “Mr. Powell, with the Fed balance sheet highly correlated to expanding wealth inequality, and you now talking about tapering QT, Joe Six-pack wants to know why the Balance Sheet needs to remain $3T above where it was pre-pandemic? Do we really have to retain the $3T printed up in just three months in 2020 for an emergency that is now way over? What is so structurally different about the economy that it requires so much more printed money, now? Huh, punk?”