This Week's Monster Truck Rally Didn't Disappoint

November 4, 2022

Happy Friday!

Last week Apple saved the market...

...This week apple and the rest of the Nasdaq stocks sank lower than rest of the market.

The Nasdaq was down 3% on the week.

Apple was down 5%.

What gives?

There are a few things at play here...

First, last week's rally was fueled by short covering ahead of the Fed meeting this week.

Which I call these Fed meetings, monster truck rallies.

That's because markets go wild right after the announcement.

As expected, the Fed raised rates by 75 basis points, and the market's relief at that news was short-lived.

That's because during Jerome Powell's press conference maintained an aggressive (hawkish) tone to raise rates in the future.

Also, Friday's jobs report showed that wage growth is still lagging behind inflation.

That's not good news for workers, and it's also not good news for companies' profits.

Investors are worried that the Fed will keep raising rates until they finally get ahead of inflation, which could cause a recession.

So far this year, the market has been in a tug-of-war between Wall Street and the Fed's interest rate hikes.

And it looks like the Fed is winning... at least for now.

But that means more financial pain for every American.

Due to this week's wild action, we didn't enter any new trades.

The CBOE Volatility Index (VIX) closed this week at 24.

That's unchanged from last week.

Even though volatility remains elevated, we're seeing less worry.

But we will continue to see those 100-point swings in S&P 500. 

Now let’s talk shop.

Portfolio Update

Here’s a recap of what we did this week.

On Monday - Friday:

  • No new positions

Right now, we’re holding:

  • CCL Nov. 18, 2022, $9/$10 call spread

Have a great weekend and it's time to enjoy a ice cold spicy margarita - TGIF! 

Joshua M. Belanger

Joshua M. Belanger
Joshua Belanger is founder of CounterVest and the editor of Hot Money Trader. He has been providing ordinary investors blockbuster returns since 2008. In 2018, the average return of Hot Money Trader beat the markets by over 15%