Power Plays Update: Thoughts on the Market

April 12, 2023

By Scott Redler

With the CPI out of the way and bank earnings coming on Friday, I wanted to chime in with a market update.

If you read all the news, you’d think we'd be at the 2022 bottom.

Instead, we have the QQQ's 20% off the lows in a supposed new bull market.

The price action is good at times but swing trading opportunities are few and far between.

It's definitely been more of a scalper’s market rather than a buy and hold environment.

Most fast moves have been false moves, and things just tend to fizzle out.

We saw that with the reaction to the CPI. SPX futures rallied almost 40 handles and then gave it all back.

The bulls are pointing to:

  • The dovish shift in monetary policy
  • Earnings tailwinds from cu cost cut and the US dollar declining
  • A favorable technical setup with negative sentiment

The bears are focused on:

  • Economic growth tailwinds
  • Somewhat expensive valuations
  • The market being too aggressive in pricing in rate cuts

The bear arguments seem to be getting more attention.

But for now, when you mix all this up, it's hard to sink your teeth into things.

This is why I've been very selective with Power Plays, and giving names more room for risk management. 

From a technical perspective, on the SPX weekly chart, we are above the downtrend and trying to digest above the moving averages.

We need to hold SPX 4069ish to keep potential for a Spring-to-Summer move towards the 4195 to 4280 area.

I do not see the Fed cutting rates unless the market has a huge decline. The potential for that increases if we break under that SPX 4069 level.

As far as Friday's bank earnings go, I'm staying away. The reports tend to be very sloppy in normal times. So coming off the regional banking mess, I'm really not interested in participating.

Be safe out there.


Scott Redler Positions Disclosure as of 2023-04-12 at 11.55.55 AM