Index level performance was mixed yesterday, yet action under the surface skewed more positive. Still, there was not a lot of conviction on either side of the tape. Uncertainty about the debt ceiling remains front of mind for market participants.
Over the weekend, Treasury Secretary Janet Yellen reiterated in an interview that early June is a "hard deadline" for the debt ceiling and that the odds the US can pay all its bills on June 15 are "quite low" without a debt ceiling increase, according to NBC News. House Speaker Kevin McCarthy, though, told reporters that it's possible to get a deal tonight or later this week, according to CNBC.President Biden and House Speaker McCarthy plan to meet around 5:30 p.m. ET tonight for further discussions. There was also some commentary from Fed officials for market participants to digest today. Minneapolis Fed President Kashkari (FOMC voter) said in a CNBC interview that a decision to pause in June is a close call, adding that if the Fed pauses in June, it does not mean the tightening cycle is over. St. Louis Fed President Bullard (not an FOMC voter) said he thinks two more rate hikes are needed this year, according to Bloomberg. Stocks didn't have an outsized reaction to the aforementioned catalysts.
Chart: SPY daily and 15 mins
The SPY is weaker than QQQ, but it is still relatively strong. Although its extended from the 8 & 21 moving average, however, the support in the area around 417.2 yesterday is relatively firm. At the same time, the selling pressure superimposed moving average deviation around 420 above and the FOMC mins tomorrow are also doomed to the market. Therefore, it is unlikely to rush up today. Personally, I prefer SPY to oscillate in the range between 417.2 and 420 today, or even wait for the 8-day moving average to move closer. IF SPY open high but lower than 420ish level, I prefer to use yesterday's high to short some SPY.
Chart: QQQ daily and 15 mins
QQQ is stronger than SPY, mainly due to the recent performance of technology stocks, the logic is similar to SPY, if today can not break yesterday's pre-market high, or it may form a short-term double top.
Over the weekend, Treasury Secretary Janet Yellen reiterated in an interview that early June is a "hard deadline" for the debt ceiling and that the odds the US can pay all its bills on June 15 are "quite low" without a debt ceiling increase, according to NBC News. House Speaker Kevin McCarthy, though, told reporters that it's possible to get a deal tonight or later this week, according to CNBC.President Biden and House Speaker McCarthy plan to meet around 5:30 p.m. ET tonight for further discussions. There was also some commentary from Fed officials for market participants to digest today. Minneapolis Fed President Kashkari (FOMC voter) said in a CNBC interview that a decision to pause in June is a close call, adding that if the Fed pauses in June, it does not mean the tightening cycle is over. St. Louis Fed President Bullard (not an FOMC voter) said he thinks two more rate hikes are needed this year, according to Bloomberg. Stocks didn't have an outsized reaction to the aforementioned catalysts.
The SPY is weaker than QQQ, but it is still relatively strong. Although its extended from the 8 & 21 moving average, however, the support in the area around 417.2 yesterday is relatively firm. At the same time, the selling pressure superimposed moving average deviation around 420 above and the FOMC mins tomorrow are also doomed to the market. Therefore, it is unlikely to rush up today. Personally, I prefer SPY to oscillate in the range between 417.2 and 420 today, or even wait for the 8-day moving average to move closer. IF SPY open high but lower than 420ish level, I prefer to use yesterday's high to short some SPY.
QQQ is stronger than SPY, mainly due to the recent performance of technology stocks, the logic is similar to SPY, if today can not break yesterday's pre-market high, or it may form a short-term double top.
