Scott Burrill - Market Notes

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Scott's notes
Scott's Market Notes

Preparing for Information Deluge

Jul 28, 2019

Good Evening:

As we begin one of the busiest information-flow weeks of the year, Markets face an onslaught of key Economic Releases, the FOMC's Rate Ease followed by Chair Powell's Press Conference, as well as hundreds of companies reporting earnings, and a resumption in trade talks between the US and China.

It's a pivotal week for known catalysts at the peak of Earnings Season.

However, with this backdrop, the SP500 Weekly Option Implied Move is only + / - 39 points, or an Upper Bound of 3064.71 or a Lower Bound of 2987. This forecast seems questionable in light of the Option Market inefficiently mispricing risk to the downside and the upside these past two weeks.

With the Fed certain to cut on Wednesday, and that cut likely to be 25 basis points, focus will turn to their Statement, Dot Plots and Chair Powell's Press Conference. A Hawkish tone certainly would not bode well for Bonds or Equities. Moreover, the wind, but for Buybacks, is certainly no longer at Financials' backs.

Overall Trends remain Up, but recent rotation is noted in Oil, Utilities and Real Estate.

The Bias too remains Up, but just like last week, the Magnet is usually tested early to establish it. It certainly is logical for that to occur after Friday's rally.

Updated Levels.

Have a great week.

All the best,

Scott

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