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T3’s Take 3: Stocks Grind and We All Ask What’s Next?


1) Stocks Grind After the Fed

Yesterday, we saw a pretty solid equity market rally after the Fed raised rates, but stocks went right back to sleep today.

The S&P 500 fell -0.2% to 2381.38, and the Dow and Nasdaq barely moved as well.

The action under the surface was pretty mixed.

The Russell 2000 outperformed by a tiny bit.

Regional banks made up some of the ground they lost yesterday. And some high-beta tech stocks, including Tesla (TSLA) and nVidia (NVDA), staged decent rallies.

But on the negative side, biotech saw profit-taking, with the IBB ETF falling -1.3%

2) Options Traders Running Wild

Last week, sentiment became neutral after 2 weeks of pretty serious bullishness.

Sentiment continued to deteriorate this week.

However, I noticed one interesting thing this morning: the ISE Sentiment Index showed that traders were buying call options in massive quantities.

This implies that many traders believe the post-Fed rally from yesterday was destined to continue.

Only time will tell if this morning’s extreme positivity marked a short-term top.

Read more here.

3) 2370 Is the Line in the Sand

With the market in digestion mode, traders are asking what’s next?

We’ve come a long, long way since the US Presidential election, and volatility is nowhere to be found, despite a crazy international political news flow.

This morning, my buddy Jeff Cooper laid out the argument that SPX 2370 is the line in the sand you should be watching.

Click here to continue reading.

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