Federally F’d Thursday – Bonus Rate Hike Spooks Market

I was wrong.

I did not think the Fed would be stupid enough to hike rates 0.75% – effectively doubling their current rate in one meeting – especially after telling us, over and over again, that the hike would be 0.5%.  Initially the market sold off, then it receovered, then overnight we flew higher and then we crashed and now we’re recovering.  It’s madness.  

At 2:10 pm, during our Live Trading Webinar, I posted this note to all of our Members:

0.75% hike is too much to risk bullish stance so let’s add 300 more SQQQ 2024 $60/80 bull call spreads in the STP for about $4 each ($120,000).  That will give us $480,000 additional protection for now.

That flipped our Short-Term Portfolio much more bearish as 0.75% does have repurcussions and I couldn’t believe how the market was rallying on the news yesterday but when I woke up this morning – that was all over and the rest of the World was selling US equities hand over fist.  Fed Funds Rates are effectively now 1.5% and they Fed reiterated their intention to have us over 3% by the end of the year and there are 4 meetings left so 4 more 0.5% increases are ahead of us – at least.

Even worse, the Dollar is well off it’s high of 105.60 (from Tuesday) at 104.75 and that makes no sense as no other Central Bank is keeping up with our Fed’s tightening schedule so consider that the other shoe about to drop on the market and now our lows are certainly in danger of being broken.   …

Provided courtesy of Phil’s Stock World.