You are a free subscriber to Me and the Money Printer. To upgrade to paid and receive the daily Capital Wave Report - which features our Red-Green market signals, subscribe here.
Good morning everyone… I’m Garrett Baldwin. It is March 20th. Here is the transcript for today’s quick update. I hope everybody’s having a good start to their day. It is triple witching today. So, the simultaneous expiration of options and all the other fun things that we like to speculate on. We’re on day 21 of the war, talking about $180 oil. $5.7 trillion in expiration today. Week four down. All right. So the usual rundown that we have. Mixed signals on the war. Netanyahu is saying sooner than you think for the end. Military saying not even the halfway point. And Tehran raids are ongoing. Triple witching for today for markets. $5.7 trillion in options expiration. Fourth losing week. SMCI is getting beaten up today, down 26%. FedEx had a nice little pop after its report yesterday, adding 8%. Our energy crisis really remains the story. That’s what’s weighing on this market. And Saudi’s base case is now, if these disruptions persist, $180 — that would blow through levels that we saw during the invasion of Ukraine. It would also take us back to levels that we really hadn’t even thought about going all the way back to 2008 when speculation was rampant. And then we started to have the great financial crisis. Qatar saying one-fifth of LNG output is out for up to five years, may be forced to declare force majeure with a handful of nations in terms of delivery out 36 months. So very problematic. Natural gas prices still continuing to be under pressure. Brent 110, WTI at 96. Gold testing 4,500. This is the worst weekly loss for gold in six years. And the Dow is now nearing a correction. ES this morning down about a half percent. Futures pulling back after a brief bounce on Netanyahu’s comments. Now Kharg Island blockade is being considered. So again, today, big news is triple witching. That’s going to set up. This is a trader’s market, right? And here our focus is more long-term, more macroeconomic. But again, focusing on key levels, focusing on movements in between expected moves, et cetera. Key things here just remain that volume-weighted average price is a great tool. My good friend Kenny, who has been advocating for this for a long time, looking for reversions. I’m not focusing on that today. I’m focusing just on the fact that our signal remains red and I’m looking to deploy cash at some point for longer-term investing. And it’s just not there yet. And that’s what we have to be cautious about and understand that this is a deeper downturn than what we had expected. We are now moving toward correction. That’s where we have to start looking at technicals for the possibility of short squeezes and then start to look again at what are the long-term choke points? What are the things that we can invest in that are going to kick off cash, beat inflation, and take advantage of higher energy and materials prices if they persist? Canadian retail sales will come out today. So will PPI. We’ll be watching that because they are a producer nation. France’s credit rating, we’ll get an update on that after the close today. Brent obviously up, adding another 2%, resuming after a brief pullback. WTI crude hovering in that mid-90s range and gold, again, we talked about that. So real quick review of this week as we head into third Friday. We’re down for the fourth straight week. The Dow’s off 8.3% from its record high, nearing correction territory of 10%. And of course, we know about Brent and gold. Oil reversed on Monday. WTI had dropped about 5.3%, and NVIDIA had announced $1 trillion in orders. But these are one-day moves, and one day does not make a market. Israel killed Larijani. On Tuesday, the Supreme Leader rejected peace, and there were more wide-scale strikes. On Wednesday, the Fed, like every other central bank, held its interest rates. Powell remaining hawkish. Now the expectation, no cuts this year. We went from four, five — we went from expectations of more cuts. Now we actually have to have discussions about whether the possibility of a cut in the first quarter of 2027 is even on the table. Israel struck South Pars on Thursday. Iran hit Qatar’s Ras Laffan. I’m probably pronouncing things wrong. It’s okay. EU gas adding 35% and Brent peaking near 120. And on Friday this morning, that Saudi base case at 180, Qatar one-fifth of LNG potentially out for the next five years, and the options expiration. No central bank cut. The ECB is actually talking about raising rates in April. And every cut for the year is off the table. On the war side, you know the news here. Iran lost the ability to enrich uranium or make ballistic missiles after 20 days, according to Netanyahu. Trump is now talking about the possibility of blockading or even trying to occupy Kharg Island, which is the primary source of exporting and the Revolutionary Guard basically runs that. Iran still attacking its neighbors — Kuwait, the UAE, Saudi, Bahrain, all hit overnight. Iran fires fresh missiles at Israel. They hit Haifa and Ashdod refineries, and that seems to be the war, the continuation of targeting energy infrastructure, which is making this oil crisis and now this natural gas crisis even more significant. Triple witching today, obviously, for the trading view of the world. A lot of hedging unwound today, a lot of positioning now heading into the next quarter. This is a significant day for markets because of the combination of the expiration of $5.7 trillion in options — $4.1 trillion in index, $772 billion in ETFs, and $875 billion in single stocks. So a lot of capital sloshing around today. The SPX hovering near 6,600, the Dow at 46,000, and WTI this month alone up 48%. FedEx beat on revenue, raised its full-year outlook. Shipping demand had held. Supermicro, however, getting beaten up badly this morning, 26%. The co-founder has been charged with smuggling NVIDIA servers to China. Whoops. Well, once again, keep an eye on volume-weighted average price. This is an options expiration day. That is a relatively liquid stock. So the possibility of a reversion or dip buying down around that third or fourth standard deviation is possible. The ECB hawkish surprise. Sources saying possible rate hikes starting in April. Move more likely now, joining Deutsche Bank. Day 15 is the average bottom after geopolitical shocks. We are at day 15. It is a big day for options. It is a big day for positioning. Possibility of a squeeze into the day. Always looming on a day like this. The energy stuff we’ve already covered. But once again, feast your eyes. Saudi officials see the base case for $180 per barrel if the disruptions persist until late April. What have we talked about? Well, focus on those U.S. names — names like Devon, Permian Resources, Occidental. Those appear to be the names that benefit the most. Pure play, upstream, oil and gas, energy and exploration. Steering clear of the Exxons and the Chevrons, not focusing on the vertically integrated names, really just the ones that have a significant amount of resources in their possession. And if WTI crude rises, Saudi crude continues to rise, Brent crude continues to rise, well, the underlying position will rise as well. We saw that with Devon back during the invasion of Ukraine. And it does not look like this is going to be resolved in the next week, week and a half. Our momentum indicator is still highly negative, still significant pressure to the downside at the moment. Fourth losing week, the Dow and the Nasdaq are nearing correction territory. The SPY sell signal, QQQ sell signal, and the Russell all with the sell signal. Deutsche Bank saying day 15 is the average geopolitical bottom, but $180 oil is obviously not average. I’m going to be back in a little bit with an update this morning for our members of Money Printer Pro. If you are not a member, check it out on Substack. Postcards from the Edge of the World will come out this weekend, focusing on the energy side, and InsiderStockBuys.com and the Insider Buying Report. Nothing significant to announce on the insider front, with the exception of CRM, Salesforce, having a second big director purchase. That is significant because that is a larger name with all of this buying, despite the fact of concerns about what’s going on in the Middle East. CRM has seen two significant insider buys. We’ll be talking about that today at the Insider Report. All right, everybody, we’re going to wrap it up. That’s Garrett Baldwin for March 20th. I hope you all have a great trading day, or investing day, or just a great day in general. Any questions that you have, please just hit reply or drop a note in the chat or in the comments, and I will get to them when there is some free time on a day like today. Enjoy your day. Stay positive, Garrett Baldwin About Me and the Money Printer Me and the Money Printer is a daily publication covering the financial markets through three critical equations. We track liquidity (money in the financial system), momentum (where money is moving in the system), and insider buying (where Smart Money at companies is moving their money). Combining these elements with a deep understanding of central banking and how the global system works has allowed us to navigate financial cycles and boost our probability of success as investors and traders. This insight is based on roughly 17 years of intensive academic work at four universities, extensive collaboration with market experts, and the joy of trial and error in research. You can take a free look at our worldview and thesis right here. Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.
|
Post a Comment
Post a Comment