The Squeeze Is On - It's Fed Time

[] The Markets are preparing for an announcement by the Federal Reserve on Wednesday afternoon. The Fed is expected to raise interest rates by 75 basis points. [View in browser]( . The Markets are preparing for an announcement by the Federal Reserve on Wednesday afternoon. The Fed is expected to raise interest rates by 75 basis points. [View in browser]( . . [] [Havens Investment Letter] [] [Havens Investment Letter] [] [] [] This 12-time World Trading Champion Wants To Trade With You! He’s won the prestigious World Traders Challenge a total of 12 times... and it’s no wonder why, when he specializes in finding low-priced stocks that move 30%... 60%... even 100% in mere hours! Now he’s teaching his unique strategy to a small group of traders -- and inviting you to learn his system! [Click here to learn more!]( [] --------------------------------------------------------------- [] This 12-time World Trading Champion Wants To Trade With You! He’s won the prestigious World Traders Challenge a total of 12 times... and it’s no wonder why, when he specializes in finding low-priced stocks that move 30%... 60%... even 100% in mere hours! Now he’s teaching his unique strategy to a small group of traders -- and inviting you to learn his system! [Click here to learn more!]( [] --------------------------------------------------------------- [] [] The Squeeze Is On - It's Fed Time [Garrett Pic] Momentum is Red. With that said, I’ve moved to cash and taken a speculative long position on the SPY into Wednesday and stopped shorting the market. The market is so “net short” that it’s time to be contrarian. I’m currently speculating on a move north of $392 on the SPY by Wednesday afternoon. I think we’ll get there by tomorrow, assuming no significant impact to the markets by the earthquake in Mexico. Dear Investor, The squeeze is on. The S&P 500 rallied on low volume again Monday, coming off near-term lows from Quad Witching. These are tough markets to navigate. But if you look back to June for clues, you might find some opportunities ahead. Right now, the market is bearish. Too bearish. Recent data from Bloomberg shows that S&P 500 futures net positioning is the most bearish the market has been since… Four previous crises in the last 14 years. The last times that the market was this net short were the 2008 Financial Crisis, the 2011 Debt Ceiling crisis, the Chinese Yuan crisis in 2015, and the COVID-19 crisis of 2020. What a perfect visual representation of financial stability by central banks during my critical earnings years as a millennial. So much strength in the global markets… no wonder millennials are the most aggressive movers to cash in this market right now. Welcome to the Fed Drift Between September 1994 and March 2011, an interesting phenomenon happened ahead of the Fed’s monetary policy announcements. It was called the pre-FOMC announcement “drift.” Economists David Lucca and Emanuel Moench explained it in 2012: “For many years, economists have struggled to explain the “equity premium puzzle”—the fact that the average return on stocks is larger than what would be expected to compensate for their riskiness. In this post, which draws on our recent New York Fed staff report, we deepen the puzzle further. We show that since 1994, more than 80 percent of the equity premium on U.S. stocks has been earned over the twenty-four hours preceding scheduled Federal Open Market Committee (FOMC) announcements (which occur only eight times a year)—a phenomenon we call the pre-FOMC announcement “drift.” The fascination with this anomaly has been quite profound over the last decade. Especially as the Fed kept cutting rates and pumping money into the system. Economists and analysts have noted the “disappearing” FOMC drift over the last few years. In a 2021 article in Finance Research Letters, three economists wrote: “We extend the sample to December 2019. We find that after first appearing before FOMC announcements accompanied by the Fed Chair press conferences, the Pre-FOMC drift essentially disappeared after 2015 in both announcements accompanied by press conferences and announcements not accompanied by press conferences.” Disappeared? For four years? It goes without saying that the market had benefited from lots of rate cuts and cheap money. But interestingly, it’s reemerged a little on the back of 2022 Fed meetings. There has been ample movement to the upside during meetings this year - largely as the Fed announces its intentions to raise rates. Perhaps it’s short covering… perhaps it’s a matter of speculators taking excess bets off the table for even higher rate hikes. But we’ve also witnessed some interesting gains on Fed meeting days AFTER the announcement by the Fed. Call it the “Relief Drift.” The post-announcement rallies have been stunning. In March, as the Fed prepared for a 50-point hike, we saw a noticeable rally in the market in the period leading up to the announcement. (March 15-16) We see another noticeable move from May 4 to May 5, as the Fed hiked rates by 75 basis points. Then there was the dagger in June. We see a rally higher into the close on June 14, and the market peak out after the Fed announcement. The next day it bombed. And in July? Another pop on the back of positive momentum. After the Fed announced 75 basis points and little concern about recession, it just kept rallying. This forced some short covering, and the rest is history. This is a reminder that the market is not the economy, and the economy is not the market. But when the Fed offers just a glimmer of hope, markets will respond with a surprise. I anticipate that 75 basis points are coming. With that said, there are still ample positions out there betting on a 100-point move higher. When that doesn’t happen, anyone who is shorting this market may have to cover - creating a very attractive short squeeze environment. I’ll discuss this Wednesday during our roundtable. You’ll receive an invitation soon. Enjoy your day, [Garrett signature] Garrett {NAME} Chief Analyst, American Markets [] --------------------------------------------------------------- [] [] The Squeeze Is On - It's Fed Time [Garrett Pic] Momentum is Red. With that said, I’ve moved to cash and taken a speculative long position on the SPY into Wednesday and stopped shorting the market. The market is so “net short” that it’s time to be contrarian. I’m currently speculating on a move north of $392 on the SPY by Wednesday afternoon. I think we’ll get there by tomorrow, assuming no significant impact to the markets by the earthquake in Mexico. Dear Investor, The squeeze is on. The S&P 500 rallied on low volume again Monday, coming off near-term lows from Quad Witching. These are tough markets to navigate. But if you look back to June for clues, you might find some opportunities ahead. Right now, the market is bearish. Too bearish. Recent data from Bloomberg shows that S&P 500 futures net positioning is the most bearish the market has been since… Four previous crises in the last 14 years. The last times that the market was this net short were the 2008 Financial Crisis, the 2011 Debt Ceiling crisis, the Chinese Yuan crisis in 2015, and the COVID-19 crisis of 2020. What a perfect visual representation of financial stability by central banks during my critical earnings years as a millennial. So much strength in the global markets… no wonder millennials are the most aggressive movers to cash in this market right now. Welcome to the Fed Drift Between September 1994 and March 2011, an interesting phenomenon happened ahead of the Fed’s monetary policy announcements. It was called the pre-FOMC announcement “drift.” Economists David Lucca and Emanuel Moench explained it in 2012: “For many years, economists have struggled to explain the “equity premium puzzle”—the fact that the average return on stocks is larger than what would be expected to compensate for their riskiness. In this post, which draws on our recent New York Fed staff report, we deepen the puzzle further. We show that since 1994, more than 80 percent of the equity premium on U.S. stocks has been earned over the twenty-four hours preceding scheduled Federal Open Market Committee (FOMC) announcements (which occur only eight times a year)—a phenomenon we call the pre-FOMC announcement “drift.” The fascination with this anomaly has been quite profound over the last decade. Especially as the Fed kept cutting rates and pumping money into the system. Economists and analysts have noted the “disappearing” FOMC drift over the last few years. In a 2021 article in Finance Research Letters, three economists wrote: “We extend the sample to December 2019. We find that after first appearing before FOMC announcements accompanied by the Fed Chair press conferences, the Pre-FOMC drift essentially disappeared after 2015 in both announcements accompanied by press conferences and announcements not accompanied by press conferences.” Disappeared? For four years? It goes without saying that the market had benefited from lots of rate cuts and cheap money. But interestingly, it’s reemerged a little on the back of 2022 Fed meetings. There has been ample movement to the upside during meetings this year - largely as the Fed announces its intentions to raise rates. Perhaps it’s short covering… perhaps it’s a matter of speculators taking excess bets off the table for even higher rate hikes. But we’ve also witnessed some interesting gains on Fed meeting days AFTER the announcement by the Fed. Call it the “Relief Drift.” The post-announcement rallies have been stunning. In March, as the Fed prepared for a 50-point hike, we saw a noticeable rally in the market in the period leading up to the announcement. (March 15-16) We see another noticeable move from May 4 to May 5, as the Fed hiked rates by 75 basis points. Then there was the dagger in June. We see a rally higher into the close on June 14, and the market peak out after the Fed announcement. The next day it bombed. And in July? Another pop on the back of positive momentum. After the Fed announced 75 basis points and little concern about recession, it just kept rallying. This forced some short covering, and the rest is history. This is a reminder that the market is not the economy, and the economy is not the market. But when the Fed offers just a glimmer of hope, markets will respond with a surprise. I anticipate that 75 basis points are coming. With that said, there are still ample positions out there betting on a 100-point move higher. When that doesn’t happen, anyone who is shorting this market may have to cover - creating a very attractive short squeeze environment. I’ll discuss this Wednesday during our roundtable. You’ll receive an invitation soon. Enjoy your day, [Garrett signature] Garrett {NAME} Chief Analyst, American Markets --------------------------------------------------------------- [] Bitcoin Bull Declares: “STOP Buying Altcoins!” [bitcoin bull]( [Join him for this FREE crypto workshop to learn his higher-probability strategy]( --------------------------------------------------------------- [] [] Bitcoin Bull Declares: “STOP Buying Altcoins!” [bitcoin bull]( [Join him for this FREE crypto workshop to learn his higher-probability strategy]( --------------------------------------------------------------- [] [] [] 20-Year CBOE Vet Reveals: “This is My Answer to Volatility” Alan Knuckman is a CBOE veteran who has made millions trading the market, appearing regularly on every major financial network in the company. But today—after 3 years of research—and billions of data points analyzed… He’s revealing one of the biggest breakthroughs of his career! It’s a research project that helps solve the scariest issue for most traders… [Click here to learn Alan’s solution for volatility]( --------------------------------------------------------------- [] [] [] 20-Year CBOE Vet Reveals: “This is My Answer to Volatility” Alan Knuckman is a CBOE veteran who has made millions trading the market, appearing regularly on every major financial network in the company. But today—after 3 years of research—and billions of data points analyzed… He’s revealing one of the biggest breakthroughs of his career! It’s a research project that helps solve the scariest issue for most traders… [Click here to learn Alan’s solution for volatility]( --------------------------------------------------------------- [] [] Article Recap - [The Squeeze Is On - It's Fed Time](#i572731) - [0-Year CBOE Vet Reveals: “This is My Answer to Volatility”](#159895) --------------------------------------------------------------- [] Article Recap - [The Squeeze Is On - It's Fed Time](#i572731) - [0-Year CBOE Vet Reveals: “This is My Answer to Volatility”](#159895) --------------------------------------------------------------- [] © 2022 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of GFP’s communications should be considered or used as personalized investment advice. GFP recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: GFP communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information, please visit [our disclaimer page here.]( Sent to: {EMAIL} [Unsubscribe]( Godesburg Financial Publishing Inc., 251 Little Falls Drive, Wilmington, DE 19808, United States [] © 2022 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of GFP’s communications should be considered or used as personalized investment advice. GFP recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: GFP communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information, please visit [our disclaimer page here.]( Sent to: {EMAIL} [Unsubscribe]( Godesburg Financial Publishing Inc., 251 Little Falls Drive, Wilmington, DE 19808, United States