"Game Over!"

Hi There! The anticipation of Reuniting with my brave daughter, serving in the U.S. Air Force, after a year apart fills my heart with sheer happiness! I've missed her more than words can express. The countdown to her homecoming has begun, and I can hardly contain my excitement. I can't wait to shower her with love and create cherished memories during our precious time together. 

Alright, let’s dig in!

Last week, the financial markets remained locked in a defined range, with the S&P 500 fluctuating between support at 4,330 and resistance at 4,540. Despite mounting concerns about rising inflation driving up oil prices, equities managed to maintain their stability within this range. Analysts are closely watching for a potential breakout in either direction, and the upcoming Fed meeting could provide the catalyst for such a move.

On Friday (9/15/2023), stock markets experienced a dip as a result of a significant options expiration during the third triple witching day of 2023, leaving investors anxious about the outcome of the upcoming Fed meeting. The Dow managed to finish the week on a positive note, posting a modest gain of 0.12%. However, the S&P 500 and Nasdaq endured their second consecutive week of losses, with declines of 0.16% and 0.39%, respectively.

Here are other key highlights from last week:

• Oil prices hit a 10-month high last Friday, posting a third weekly gain

• Bitcoin (BTC) bounced from a 3-month low below $25,000

• Italian luxury watch brand Panerai introduced digital passports with NFTs

• Polygon 2.0 implementation kicked off with three new proposals

Here’s what to expect this week:

This week promises to be a central bank extravaganza around the world, with the spotlight firmly on the Federal Reserve's Interest Rate Decision scheduled for Wednesday. Market expectations point toward a status quo scenario, where interest rates are likely to remain unchanged at their current level of 5.50%, marking the highest they've been since 2001.

In addition to the Fed's announcement, all eyes will be on a flurry of economic indicators in the U.S., including the release of S&P Global PMI figures and a slew of housing indicators such as Housing Starts, Building Permits, Existing Home Sales, and the NAHB Housing Market Index. These data points will undoubtedly play a crucial role in shaping market sentiment and direction throughout the week.

This is a light week for earnings. The most notable earnings for the week (September 18 - September 22) are outlined in red in the chart below.

This week’s Global Economic Data Highlights:

• UK CPI (Wednesday) – expected to go up to 7.1%.

• BoE Meeting (Thursday) – this could be the last hike in the cycle.

• BoJ Meeting (Thursday) – anticipated to remain the same.

• UK PMIs (Friday) – if below expectations, the GBP could be sold hard.

• EU PMIs (Friday) - weak numbers can cause EUR to drop.

This week's anticipated bias (not financial or investment advice):

• Monday (09/18/23) - Neutral; Trade volume

• Tuesday (09/19/23) - Bearish

• Wednesday (09/20/23) - Avoid early morning trading

• Thursday (09/21/23) - Trend Trade

• Friday (09/22/23) - Expect profit taking and positioning

Trading Tip: The second half of September has historically been bearish!

Week 09/10/23 - 09/16/23 Recap

Special Tools and Strategies

The Fear and Greed Index is a tool that helps us understand what's happening in the stock market. It's like a barometer for investor emotions.

Here's how it works:

• The index is built on the belief that fear and greed are the main emotions that affect how people invest. When investors are scared (fear), they tend to sell. When they're feeling greedy (greed), they're more likely to buy.

• CNN developed this tool to figure out what's driving the stock market at any given time. It helps us understand the overall mood of the markets.

• It's calculated by looking at seven different indicators that measure how the stock market is behaving. They are market momentum, stock price strength, stock price breadth, put and call options, junk bond demand, market volatility, and safe haven demand. The index gives each of these things equal importance and gives a score from 0 to 100. A score of 0 means everyone is very scared, and 100 means everyone is very greedy.

When we read the Fear and Greed Index, here's what it tells us:

• A score between 0 and 24 means there's extreme fear. People might be selling risky things and buying safer ones like government bonds or gold. This could be a good time to buy stocks if you're willing to take a chance.

• A score between 25 and 49 means there's fear, but not extreme. People are a bit cautious, and the market might be getting ready for a drop.

• A score of 50 means things are neutral, like a calm day. Investors aren't too scared or too greedy, and the market is stable.

• A score between 51 and 75 means there's greed. People are taking more risks and buying a lot. But too much greed can lead to prices being too high, and the market might drop.

• A score between 76 and 100 means there's extreme greed. Everyone is buying a lot, and prices can get way too high. This can lead to bubbles, where prices are much higher than they should be.

Practical Uses for the Fear and Greed Index:

• It helps investors make decisions based on market sentiment.

• It assists with risk management by aligning portfolios with tolerance levels.

• Traders can use it to adjust their strategies, buying during extreme fear and selling during extreme greed.

• It aids in forecasting market trends; fear suggests a bearish market, while greed indicates a bullish one.

• It safeguards against market manipulation by keeping investors aware of sentiment, preventing potential pitfalls.

“Be fearful when others are greedy and be greedy only when others are fearful." ~ Warren Buffet

Disclaimer: This newsletter is strictly educational. The information this report provides does not constitute investment, financial, trading, or any other advice. You should not treat any of the report’s content as such. Please be careful and do your research.