Equities Boosted From META & MSFT, APPL & AMZN on Tap Today!

April 29th MTR Subscriber Data Tracker

Well yesterday’s initial down move in the morning post GDP that took the SP500 down about 100 points, was systematically brought right back up. The buying continued most of the day and into the close. This of course led into the post close earnings reports from none other than Microsoft and META and well, the market just took off from there.

We often wonder if the insiders make certain moves and if yesterday’s initial sell off was bought back up because a few knew that earnings were going to go well. We saw no reason other than the anticipation of an earnings blowout for the equity markets to exhibit such a swift decline post GDP to then be systematically bought up all day long. Well its as if someone knew and boy were they right, given the nice post GDP discount, well the market never looked back.

We won’t dive into the numbers because, well, they just don’t matter. We believe earnings are backward looking. We know this will surprise many, but we have been at this far too long to know that any information that seems unknown, is known to a very few. These very few have already positioned it and will use the post earnings move to exit at massive profits. Take for instance the move in MSFT today, we should have known higher was the path of least resistance 5 consecutive daily closes above our bull/bear pivot at $385 and today it gaps up 8.3% and putting in a high at $436.99:

Now what? Will MSFT trickle back and fill in some of this euphoria down below? Probably and we honestly feel since nothing economically has changed, this is most likely a good entry point sale on the sheer premise alone is that they hype of earnings will wane over the coming weeks. No doubt our pivot will move up now well into the low $400s so if your not exiting here, your certainly shouldn’t be a proactive buyer here into the highs, rather wait patiently for some decent move down if you want to be long this thing.

Same goes for META we would be better sellers butting up against our pivot there at $595. We expect solid resistance and sellers licking their chops today. Above $595 and it will flip long so you shorts out there, pretty low risk/reward to short META outright or put structures:

Ok let’s take a look at AAPL and AMZN at the money straddles for expiration tomorrow. First up Apple and we will target the $212.50 straddle, which is priced at $9.40. This has an implied move of around 4.4%. Straddle buyers will need a move above $221.90 or below $203.10. When we look at the chart the technical outlook is positive for Apple above $201. Big put interest at $200 and big call interest at $215. As opposed to the outright put or call spreads, the straddle seems to be priced fairly and seems like a safe play:

Alright let’s go with Amazon now, here we look at the $190 strike its priced at $11.90, indicating a 6.2% move so a bit more volatility here expected. Amazon is below our pivot still but this earnings may finally get it back above:

There is plenty of call interest above from $195 to $215 and decent put interest from $185 to $170. So breakeven prices for the stock via the straddle is a move above $201.90 or below $178.10.

All in all when we look at the Nasdaq futures they are bullish above the Bull/Bear pivot above 19200 they have taken out the first resistance this week at 19975 and will target 20558. The bulls are in firm control and even if the non farm payroll report comes out weak tomorrow, it seems any down move if it occurs will now be bought:

We also have the 50pSMA, which we know the bulls will want to get a close above. I have seen this playbook before, there is no reason to be bullish on the coming recession. We now have Q1 GDP negative and barring a complete turnaround expect Q2 to be negative as well, thus ushering in a recession technically. Why then Magnelibra are stocks moving higher?

Well, like we said we have seen this before and equity prices have nothing to do with the economy. I know this is hard to fathom, but equities are a function of global M2 multiplied by some leverage factor. So if M2 is rising, nominal prices will rise, its really that simple.

Also we have equity investors that think the FOMC will ramp up QE once again after they start cutting rates again. Remember a few months ago when the call for rate cuts this year fell to 1 from all the main stream peeps, and Magnelibra kept their call for 100bp of cuts and expect 3.25% Fed Funds or lower. We continue to think this will be our base case. The bond market has told us this, the equity market bounce has confirmed it, nobody is worried now that equity prices will fall. Everyone is back all in and will ride this same wave, this wave that has ramped stocks for nearly 3 decades.

BUY BUY BUY -Jim Cramer

So the lesson here is organic economics doesn’t affect equity prices, it hasn’t done so in a very long time. Everything is financialized and now we have the crypto currency sector which will also add some nice leverage to everything should be more cannon fodder for long term bulls.

With the crypto’s comes the brave idea of “Stable-Coins.” These are nothing but a digital unaudited twin of a fiat currency. The US Treasury allows it because its an outlet to create demand for its debt, the stable coin issuers take in real investor dollars, conjure up and sell a little USDT (Tether) or USDC (Circle) and then use that fiat to buy US TBills. Voila! You make an instant 4.25% for creating a synthetic digital twin, the US Govt likes it because you buy their debt creating a new blue ocean of demand! However do you see the problem of unaudited digital twin “money.” Its really just another form of debasement!

Alright, so let’s see how the earnings go and let’s see how the markets react to tomorrow non farm payrolls! For now bulls need to close the week out strong, if they do, then we will expect new all time highs again for equities, if they waffle up here and close below our resistance points, well, then the bulls could give way to new found sellers and that could lead to a consolidation to lower move. So this weeks settles seems pretty significant to set the tone for the rest of the month!

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