Weekly Wisdom: Fed Cuts Pushed Back Again

Greetings fellow traders and welcome to your April 18th edition of Weekly Wisdom: Levels to Know and Moves to Look For!

Now let’s get to what we’re currently seeing in these volatile markets and what we have our focus on going forward.

Taking a look back on this week, April 15 – 19:

• Markets have continued to sell lower this week as economic data stays strong and the anticipated Fed funds cuts are once again pushed back, with the majority now looking at September for the first rate cut to come.  
• Data for the week began on Monday with a beat for retail sales m/m coming in at 0.7% vs 0.4% expected; core retail sales m/m also beat at 1.1% vs 0.5% expected. We then saw a miss for the Empire State Manufacturing Index at -14.3 vs -5.2 expected. Later in the morning we saw a miss for business inventories m/m at 0.4% vs 0.3% expected. The NAHB Housing Market Index came in line at 51.  
• Tuesday morning started off with a couple more misses for building permits coming in at 1.46 million vs 1.51 million, as well as housing starts at 1.32 million vs 1.48 million. Later in the morning, industrial production m/m came in-line at 0.4%, with capacity utilization rate also roughly inline at 78.4%. 
• Wednesday’s Beige Book did not bring much new information or movement to markets on its release.
• Thursday’s weekly unemployment claims were a slight beat at 212,000 vs 215,000 expected. The Philly Fed Manufacturing Index was also a beat at 15.5 vs 1.5 expected. Later in the morning, existing home sales were 4.19 million vs 4.20 million expected, while the CB leading index m/m missed at -0.3% vs -0.1% expected.  
• Friday, April 19 does not bring any meaningful data to end the week.

Here’s what we are eyeing next week, April 22 – 26:

Level Highlights:

• $SPX futures have traded lower this week, down to a low of 5042 on Thursday.
• As of Wednesday morning, Fed futures are now pricing just a 15% chance of a rate cut to come at the June meeting, with a 43% chance of a cut at the July meeting, and now in the lead is a 69% chance cut at the September meeting.  
• It is important to note that there are still two US CPI readings to be released before the Fed meeting in June.  
• $SPX futures at this point have broken momentum support and are now approaching a larger support zone between 5025-4975.  
• Should this be the start of a real correction, major support under 5000 comes at 4850.
• $VIX broke up through the 17 high this week, trading up to 19.50 on Tuesday. Bulls should start to watch for signs of a divergence between $VVIX and $VIX, where the $VIX keeps showing strength but $VVIX begins to weaken out, which could signal a better market bounce to come.  
• A $VVIX move back below 92 should start to weaken out the $VIX and bring better buying in as well.  

Upcoming News:

• Monday, April 22 does not start the week off with meaningful economic data.  
• Tuesday, April 23 brings us flash manufacturing PMI and flash services PMI at 9:45 a.m. ET. This is followed by new home sales and the Richmond Manufacturing Index at 10:00 a.m. ET. The Treasury currency report is tentatively set to be released on Tuesday as well. 
• Wednesday, April 24 brings us data for durable goods orders m/m and core durable goods orders m/m at 8:30 a.m. ET.
• Thursday, April 25 starts off with an update for advance GDP q/q, advance GDP price index q/q, the goods trades balance, prelim wholesale inventories m/m, and weekly unemployment claims all at 8:30 a.m. ET. These are followed by the update for pending home sales m/m at 10:00 a.m. ET. 
• Friday, April 26 brings some important data to end the week with updates for core PCE price index m/m, personal income m/m, and personal spending m/m at 8:30 a.m. ET. We’ll then see revised University of Michigan consumer sentiment and inflation expectations at 10:00 a.m. ET.

Here’s Your Chart of the Week:

A little bit of prior $BTC halving performance history with the next Bitcoin halving event currently expected to occur this week around early Saturday, April 20th. Bitcoin halvings are scheduled to occur once every 210,000 blocks – roughly every four years – until the maximum supply of 21 million bitcoins has been generated by the network. 

Source

SPY Daily Update:

$SPY has continued to sell lower this week as Fed funds future cuts are once again pushed back. Some support coming in below can be found at 498 and 494. Should we bounce soon, prior support of 503 and 506 is likely to be resistance now.

SPY Weekly Update:

$SPY is selling lower for now the third week in a row, which will be the longest weekly sell streak since the pull back in August 2023. Should we continue selling, $SPY does have multiple support levels ranging down to the upper 470s.

Want to get this newsletter by email? Subscribe here.

Want to Trade With My Team? Click here!

-Patrick Hawe

Disclosures

Patrick Hawe’s current positions:

*As of 2:15pm ET April 18, 2024

Patrick Hawe is an Associated Member of T3 Trading Group, LLC (“T3TG”), a SEC Registered Broker-Dealer & Member of FINRA/SIPC. All trades made are placed through T3TG.

T3 Live, LLC is a financial publisher that disseminates information about economic, business, and capital markets issues through various media. T3 Live is not a Broker-Dealer, an Investment Adviser, or any other type of business subject to regulation by the SEC, CFTC, state securities regulators or any “self-regulatory organization” (such as FINRA). Although T3 Live and T3TG are affiliated companies by virtue of common ownership, the companies are managed separately and engage in different businesses.

The programs that T3TG distributes (including articles, commentary, videos, blogs and social media postings) are for informational and educational purposes only. No one should consider the information disseminated by T3TG to be personalized investment advice, a recommendation to buy, sell or hold any investment, an offer (or a solicitation of an offer) to buy or sell any investment, or the provision of any other kind of investment advice. No one associated with T3TG is authorized to make any representation to the contrary.

T3TG provides information that viewers of its programs may consider in making their own investment decisions. However, any viewer will be responsible for considering such information carefully and evaluating how it might relate to that viewer’s own decision to buy, sell or hold any investment. Such decisions must be based on that viewer’s individual and independent evaluation of his or her financial circumstances, investment objectives, risk tolerance, liquidity needs, family commitments and other factors, not in reliance on any information obtained from T3TG.

Statements by any person (whether identified as associated with T3 Live, T3 Trading Group, or any other entity) represent the opinions of that person only and do not necessarily reflect the opinions of T3TG or any other person associated with T3TG.

It is possible that any individual providing information or expressing an opinion on any T3TG program may hold an investment position (or may be contemplating holding an investment position) that is inconsistent with the information provided or the opinion being expressed. This may reflect the financial or other circumstances of the individual or it may reflect some other consideration. Viewers of T3TG programs should take this into account when evaluating the information provided or the opinion being expressed.

Although T3TG strives to provide accurate and reliable information from sources that it believes to be reliable, T3TG makes no guarantees as to the accuracy, completeness, timeliness, or correctness of any such information. T3TG makes no guarantee or promise of any kind, express or implied, that anyone will profit from or avoid losses from using information disseminated through T3TG.

All investments are subject to risk of loss, which you should consider in making any investment decisions. Viewers of T3TG programs should consult with their financial advisors, attorneys, accountants or other qualified professionals prior to making any investment decision.

The risk of loss in trading equities, options, forex and/or futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage that is often obtainable in options trading may benefit you as well as conversely lead to large losses beyond your initial investment. Past results are not indicative of future results. No representation is being made that any account will or is likely to achieve profits similar to those shown.

T3 Trading Group, LLC is a Registered SEC Broker-Dealer and Member of FINRA/SIPC. All trading conducted by contributors associated with T3TG on the Virtual Trading Floor is done through T3TG. For more information on T3 Trading Group, LLC please visit www.T3Trading.com.