Fed Day Has Arrived with Nick Santiago (Ep #488)

May 03, 2023

For more than 20 years, Master Trader Nick Santiago has been beating the markets. He’s made some incredible calls along the way and now he’s looking to spread the word. There’s no reason that the average trader should be coming up short. So now we’ve started a daily show to bring you up to date on the latest market developments. Nick will be sharing trades and concepts and discussing current trends.

Today:

1. It is Fed Day! At 2pm ET, the FOMC will make their interest rate policy decision for the US. They are expected to raise rates by 25 basis points. This is already baked into the cake, the verbiage will be what moves markets. The current fed funds rate is 4.75% and the next hike should bring it to the psychological 5% level. The central bank has some wiggle room here because the 2 year note yield is around 4%. As long as the fed funds rate is above the 2 year yield the market expects inflation to come down.

The big problem that the central bank faces though is that there are still a lot of inflationary pressures out there and that does not look like it is going away anytime soon. War is inflationary, food prices are rising, gasoline is up again and there has been a lot of money printed since 2020 roughly $13 trillion.

2. The regional bank ETF (KRE) is bouncing back today by 2%. Yesterday, the regional bank ETF (KRE) plunged lower making a new 52 week low. We have been talking about that bearish consolidation pattern and yesterday it broke.

3. Gold is pulling back a little today after surging yesterday. Gold is the new VIX and it can move higher if another bank failure emerges.

4. Oil is plunging again this morning. On April 12th, crude was trading around $83.00 a barrel and today it’s trading at $69.00 a barrel. This is a daily chart support level so it might hold for a little bit.any close below the march low at $64.12 will likely trigger a decline to around the $50.00 level. That will be a golden goose buying opportunity. Natgas is being accumulated. Buying opportunity soon. Commodities are coming back to make new highs soon.

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