Podcast EP 65 Doves Stronger than Madness (Oct 9)

$SPY $QQQ $IWM $ES_F $VIX $AAPL $AMZN $META $MSFT $NVDA $TSLA $TLT $TBT

Oct 10, 2023

Transcript

I was a bit under the weather after hosting my two nephews. Kids + Germs! But I felt compelled to get this out to everyone! Hope you have a great day!

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Show Notes

Summary of the day

As war continues in Israel/Gaza, all it took were a few dovish comments from Fed heads to goose prices. But pay attention to breadth as new lows continues to beat new highs.

The dollar index fell sharply after multiple Fed speakers such as Dallas Fed Lorie Logan and Fed vice chair Philip Jefferson reiterating what SF Fed Mary Daly said on Friday, suggesting that soaring 10Y yields have done the Fed's tightening job for them, and no more hikes are coming.

This is how UBS's trading desk put it:

Fed Vice Chair Philip Jefferson sounds dovish. He said he will remain cognizant of tightening financial conditions through higher bond yields and will keep that in mind when assessing the future path of policy. Also, he said the Fed is in a sensitive period of risk management, where they have to balance the risk of not having tightened enough, against the risk of policy being too restrictive.

I still call BS. Here is what I need to see before I can confidently call a reversal: