Sentiment Timing – Morning Notes 5/4/2022

Futures are rallying into today’s Fed decision, which is almost certain to be a 50 bp minimum hike is coming.

Unfortunately for the Fed and well us, we still need another (20) 50 bp raises to actually combat the inflation we are seeing.

If using REAL inflation, the Fed would be forced to do (40) 50 bp raises to combat REAL inflation.

So the hike today is expected and some are hoping Powell will be a bit more dovish in the press conference.

Our moronic administration is pushing Diesel fuel to all-time record highs in their push for the green new lie.

So inflation will continue higher, even as the Fed raises rates.

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If this admin continues to try and push Diesel to the sky, we will pay the price!

If it costs an extra 10%-20% more to get goods from point A to point B, that will pass on to the consumers.

So believing that inflation is close to a top, I think we aren’t even halfway to the highs.

Why I believe inflation will pass Biden’s approval rating by the end of summer, early fall.

From a technical view, I am seeing reasons to buy the dips. I mentioned the 4160/4100 area to start buying in yesterday’s report.

If you followed that suggestion, you have at the least a piece on the long side.

With this morning gap higher open, we should have about a 30-point cushion from entry.

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Depending on your risk tolerance (Fed Announcement) one could place a stop at entry {4160}.

Or you can just leave it as is and look to buy near the 4100 if we head lower after the announcement.

But make no mistake, from a logical/fundamental/bad policies view, seeing a market crash makes sense.

But we can’t trade the what if’s and can only use what is in front of us, which is extreme bearish sentiment and buy signals on the charts.

For today, the bulls need to get prices above 4190 to see a reaction trade up to 4200/4225.

The bears need to get the price back below the 4153 to get momentum going on the downside. -Gary Dean 

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SPX Hourly Technicals
Stochastics: Overbought
Divergences: Bullish Divergences (Playing Out)
Resistance Pivots: R1-4190 R2-4200 R3-4225
Support Pivots: S1-4153 S2-4130 S3-4100

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