All eyes will be on the Fed, as the market awaits a decision from one of the biggest market manipulating factors. The Fed has been saying for a while that a taper is on the horizon. Powell has indicated this for months and months, trying to prepare the market and avoid a huge correction.
The question isn't if the taper will happen but when. And as a trader, the question you should ask yourself is has the market already accounted for such an action this month. My answer is yes. Given the early warning from the Fed, the most recent news from today should already be accounted for by the market. You might see a small correction, as more novice retail traders panic from such news, but I don't see a huge sell off in the horizon.
I believe that growing debt, the rapid increase in inflation, a ballooning housing market with similar mortgage issues as in the last market crash, and foreign insolvency in China , all will play a greater role in a market downturn than a Fed tapering. Also, the Fed has indicated only 2 rate hikes from now until 2023. So although tapering will stop, a rate hike isn't imminent . A rate hike will most likely create a market correction, but as we have seen before this bull market shrugs off any 10% pull back , rebounding always into new highs
Things to watch today:
#MRNA: This stock has been one of the most volatile in the market, having huge swings, making it an option traders dream. They are about to report earnings, and this could lead to a huge swing either way. I am currently set up long here, and a call credit spread could be a great play for earnings.
#TSLA: Despite Elon Musk, this stock has a giant bullish indicator. If you have been following my trades, I have been bullish this stock for months and it has really paid off. I have added on a bull call credit spread, in addition to my already long/theta plays , since the stock had a large pullback yesterday off an Elon Musk Statement.
Other stocks I am trading :
#DASH: Short strangle , but delta towards long/theta
#GME: Short/theta put on yesterday as a strike @310
#ORGO: Long term play short buying Put
#VLDR: Long term play , bought puts
Stay tuned for a post later today on how to use Stops properly while trading.