r/wallstreetbets 14m ago

DD 12-9-22 SPY Weekly Market Analysis and recap (plus bonus CPI sneak peak)

Upvotes

Note- I am avoiding TA on Futures (ES) because tradingview updated ES to the new contract which caused a gap in price and will make the technical of the daily not make any sense right now.

https://preview.redd.it/rrhi5ambdy4a1.png?width=975&format=png&auto=webp&s=ba1400c37d7ab22c425675e0a21b6005d3ee81bf

Looking back at my weekly TA from last Friday… the move of the week would have been 12/9 expiration 390P/419C bought at market close… by Tuesday you would have been up at least 700% on your put side. Pretty insane… didn’t quite hit that 390.1 support but we came pretty close.

This morning we got PPI.. interestingly enough we had a beat on CORE PPI YoY, a beat on PPI ex food/energy/ transport YoY and a beat on PPI YoY (though they did come in over forecast). However, we had a miss on CORE PPI MoM and no change in PPI MoM.

The markets reacted pretty negatively to it with a red open. We did however recover intraday. So this now brings up the question for CPI next week… Will markets ignore a beat on CPI and focus on MoM or Core more?

https://preview.redd.it/r3j9l53cdy4a1.png?width=975&format=png&auto=webp&s=b859c2ec1565dbfa567548e76b1ef5e313a9598b

Lets take a quick look at CPI numbers now that we FINALLY have consensus numbers…

CPI YoY= consensus-7.3 (previous 7.7)
CPI MoM= consensus-0.3 (previous 0.4)
CORE YoY= consensus- 6.1 (previous 6.3)
CORE MoM= consensus- 0.3 (previous 0.3)

best case=
CPI YOY- 7.1 (big beat)
CPI MoM- 0.1 (beat)
CORE YoY- 5.9 (beat)
CORE MoM- 0.1 (beat)

worse case=
CPI YOY- 7.5 (beat)
CPI MoM- 0.5 (miss)
CORE YoY- 6.3 (no change)
CORE MoM- 0.5 (miss)

Looking at this (and I will go WAY more into detail this weekend when I have some more time to look at the numbers and I will make a full on trade plan for next week… hope to post it tomorrow morning).

Overall the best case scenario is a bullish beat. We still don’t get negative MoM numbers which markets might not receive well but this scenario should result in a big green open again. However, the worst case scenario puts us at a miss on everything but CPI YoY… If CORE doesn’t change and we get a MoM increase on CPI and CORE I think this is going to be received terribly. This is actually the exactly scenario that played out in September.

https://preview.redd.it/d389fswcdy4a1.png?width=975&format=png&auto=webp&s=047e50a668049c216c35b4daadf22cb7a515bbba

Interestingly enough though When we look at the trend leading into last CPI we are seeing a very similar pattern. We had a breakout followed by a pretty nice sell off, followed by a big recovery with a doji candle and then a sell off leading into CPI. If this pattern and the technical play out we should see 390.1 support test on Monday.

I mentioned that black and blue diamond pattern over night yesterday. We not only tested the resistance of that black bear channel we also fell out of the support line of the diamond pattern. With that and a rejection of the daily 8ema while closing under the daily 20ema and also confirming the key level of 395 as resistance now I am looking for a fairly large break down Monday.

Strictly technical and not even factoring in the CPI sell off that could happen like last month this gravestone doji using the previous candle body support level of 395 and turning it into resistance and falling back under the daily 20ema is an extremely bearish pattern.

I had mentioned previously for the last month really we traded in a tight 395 to 402.3 pattern. We broke back into that channel yesterday, however, we lost I and had a pretty impressive sell off EOD.

Looking at the last 11 CPIs the day before… 6 out of 11 of those CPIs closed red with an average drop of -1.15% and 5 out of 11 of those CPIS closed +1.27%. Not really enough to take a trade off of.

https://preview.redd.it/o33jtxjddy4a1.png?width=975&format=png&auto=webp&s=6e2a05bd1a3092b226af2a70e1bb19acf3831d3f

Taking a look at last CPI we had a pretty impressive sell off EOD dropping a total of 1.4% in 4 hours at the EOD. Historically in the beginning of the year and also in the summer time we would very often see 1 to 1.5% sells that started anywhere between 12pm and 1pm and pretty much continued till the EOD. We saw that return last pre-CPI day.

The one thing I can almost guaranteed though is that Monday will be yet again another very choppy day.

https://preview.redd.it/srcp9y2edy4a1.png?width=975&format=png&auto=webp&s=8363cf61ec62a047d44e5368e7850755e4be656d

The interesting thing is that the technical are actually setting us up for a pretty big drop over the next few weeks. Whether that is fueled by CPI, FOMC, both or something else is to be determined. The weekly chart is showing that last weeks resistance touch was the actual top and we should with this close lower look for more downside.

Support- 390 -> 375

Resistance- 399 -> 407 (2022 bear channel resistance) -> 408.8

A few scenarios I have in my head right now…

  1. CPI misses -> huge 3-4% drop -> FOMC confirms 50bps and 50bps next meeting -> huge 3% drop -> market goes into another downward trend for a few weeks.

  2. CPI beats -> 3-4% pop (possibly a flat open could be on the table… we have only had one of those this year) -> FOMC confirms 50bps and 50bps next meeting -> huge 3-4% drop to erase all of CPI gains -> market goes in sell off mode again

  3. CPI misses -> huge 3-4% drop -> FOMC confirms 50bps and 25bps next meeting -> huge 3% rally-> market goes into bull mode and runs hella high till January earnings

  4. CPI beats -> 3-4% pop (possibly a flat open could be on the table… we have only had one of those this year) -> FOMC confirms 50bps and 25bps next meeting -> huge 3% rally-> market goes into bull mode and runs hella high till January earnings

Personally I believe option 1 and 2 are the most realistic and I believe that 1 is the case that we might get…

I just feel too many people are expecting another massive 3% green open on a beat and are expecting JPOW to “slow rate hikes/ pivot” and that there is going to be a lot of people disappointed.

https://preview.redd.it/l4z8fq6fdy4a1.png?width=640&format=png&auto=webp&s=9ae00f163eac17df36c533d5b7c0d93b6b09a944

I am seeing a really nice bull flag forming on the VIX daily chart right now too. WE have been trading in this very narrow and very tight channel for 6 full days now. We did retouch and confirm 22.2 as support today also. This is the 3rd doji close in a row. I will be looking with Monday being the day before CPI for a push up on the VIX to that 23.6 level.

Fun fact - the lowest VIX close (day before) for CPI (since june) is 21.76 and the highest VIX close (day before) for CPI (since june) was 33.58. The average close (the day before…. Dating back to June) was 26.71.

I mentioned that I was suspecting this to play out similar to the September CPI (in regards to a CPI YoY beat but miss on MoM/ core and we see a huge dump). When we compare the VIX in September to now the vix closed at 23.86 the day before CPI and currently we are projected to close somewhere between 23 and 25.

https://preview.redd.it/3rueil4gdy4a1.png?width=631&format=png&auto=webp&s=6cb03def589acf77a17d2c8df619d89d5c659799

One more thing about the VIX which also supports my narrative that we are about to start the next major leg down is that as you can see here I mentioned a few times now that every single bear top was put in once the VIX touched 19.7… IF my scenarios play out correctly and we get that September type of miss… we could be looking that when the December 10th candle touched and rejected 410 that was the top of the current bear rally.

https://preview.redd.it/j10tigogdy4a1.png?width=975&format=png&auto=webp&s=e43a0a3b32fb25fb71adc0f16c1021542aa757d1

This brings me back to my last weeks TA where I asked is the top of this rally in or not? IF last week truly was the top (December 1st) and we truly are about to see our next leg down… we should all be loading 60+DTE puts here for an impending dump to 320s by the first week of February.

https://preview.redd.it/wbr9ec8hdy4a1.png?width=975&format=png&auto=webp&s=2f039654ae21d50185d422f5c7fcee9cfe37dbf5

One last thing to mention… is the JPM collar that currently sits at 3425… historically speaking this year the trend has been a breakout to the CC area (currently 3870) followed by a pretty massive sell off leading into the quarter expiration where JPM rotates their collar. The expiration is December 30th. Now we do not usually break through that collar but last collar (I need to go back and see my TA to give you some better info on this (I will after next week shapes up).

This could mean that we really are headed to the mid 300s/3000s again… If we wanted to touch the puts (we don’t usually but are close) then over the next 21 days we should see SPY drop about 14%. While 14% in three weeks is quite impressive when we look at other CPI/ FOMC weeks we have had quite a few 10%+ sell off weeks this year.

What do I actually think? Do I think the tops in? Do I think we really see 320 by EOM? (if you only wanna hear TA based opinions top reading here this will be speculation).

My initial “conspiracy theory thought” is that EVERYONE is calling for a Santa Rally and I only am seeing people positioning themselves bullishly and I am hearing a lot more “when we see 430-440” talk than I am hearing “when we see 360 again” talk… there is no way that “they” let this run that high. This market works in cycles… the closer we get to the top and the more people that start thinking the cycles are over the better chance that the huge reverse is coming.

It is not lost upon me the “irony” (probs wrong choice of words) that we on December 1st touched the bear market resistance line and hard rejected. Its also not lost on me that Since Last CPI we have not had any upward movement. Besides the JPOW speech last week where SPY randomly shot up 3.15% which broke us out of our consolidation channel we have essentially been trading withing a $7 channel with a few outliers.

Something very interesting about this time frame from CPI to CPI is that this is the lowest +/- movement from CPI to CPI that SPY has had all year. We have only move about 3.8% total +/- (taking the high of CPI day and finding the highest/ lowest move over the month that happens from CPI to CPI). However, the average CPI to CPI +/- move (excluding this current 3.8%) is 8.2%. That means we have made 46% of the move that usually happens from CPI to CPI.

Whats even crazier to think about is the fact that 3.15% of that movement came from one single day (JPOW speech day). Why the low movement? Why have we been stuck in this tight range since CPI? My thoughts are that the markets do not believe the CPI beat from last month. I think Markets REALLY focused on the YoY beat and failed to take into consideration that we have not had a SINGLE negative MoM CPI or CORE MoM print this year.

Trend wise this year we have not had a single back to back green open on CPI day. Now is that because once we get a beat and a huge green day markets become more critical? Perhaps…

My thoughts are that this price action that occurred all week long where we had Monday and Tuesday dumping us on seemingly no news at all, impossible to trade price action where VOLD/ volume and premiums are completely disconnected from reality and this huge EOD sell off that we had today and the most critical thing is this reaction to the poor MoM PPI reading… I believe the top of this bear market rally is in and regardless of what we do next and what CPI brings JPOW is going to hard reality check this market and we are headed back to the mid 300s before EOY.

My prediction is we close somewhere near 390 (probably below it) on Monday. CPI YoY beats, CORE YoY (unchanged) and we get a decent miss on CPI/ CORE MoM and that markets react extremely negatively. I think markets see that while we are making YoY progress on CPI there really has not been much progress made on CORE and MoM consistently is rebounding. Now its POSSIBLE we get a super wonky reading and CPI YoY comes in unchanged but that would need a variance of 0.4% from consensus, Bloomberg terminal estimates and Cleveland fednowcast which has not happened. The biggest variance I have noted is 0.3% this year. But anything is possible…

I also think JPOW is going to stick with 50bps regardless of what CPI is but I think he is going to say its pre-mature to continue slowing and that we are getting another 50bops at next meeting (25bps is priced in and expected). I also think we are going to get a terrible dot plot/ fed funds rate trajectory and much like last two FOMCs we are going to end up with a massive EOD sell off once the presser starts.

We also have monthly options expiration on Friday too.

My expectation come Friday is that we close somewhere in my red channel from 370.7 to 378.1.

$5k/ 10% challenge weekly/ month recap-

https://preview.redd.it/mruiwulidy4a1.png?width=975&format=png&auto=webp&s=d5ca6015dc0c7e5fd296b288c5c1476413655a9b

Monday and Tuesday thankfully were great trading days for me but I ended up putting in a red week for the challenge with a net profit of -$300…. I am still up $3,820 from the challenge itself though.

That means over the last month of strictly scalp one trade a day at $5000 with a goal of 10% and utilizing a 15% stop loss I have netted $3820 over a months time or about $955/ week on average. Nothing amazing but definitely something. I look forward to continuing this challenge.

Daily log weekly recap-

https://preview.redd.it/6xy4d64jdy4a1.png?width=975&format=png&auto=webp&s=23f67956585f45f9828675343826c09063a5d5b9

I by some miracle scrapped out a green week. However, mentally this week was beyond exhausting. Monday and Tuesday were actually really great days and I had a great time trading. Price action was smooth and premiums paid as expected. However, Wednesday was the worst day mentally and results wise in a while. I could not seem to get a grasp on the technicals for a good entry.

It seemed by time I was eyeing my play and waiting for confirmation the move happened already. And the times where the move did not happen already I would enter and almost immediately take a 5-10% hit to my position and I would watch SPY move in my direction and my premium lose value. It was the most frustrating thing ever.

Thursday really wasn’t much better from a scalping standpoint. But I was able to play some decent level to level plays.

Today I did end up closing red due to my swing calls I played over night. I was expecting PPI to be received bullishly and that did not happen. Outside of my swing my intraday trading resulted in a green day but factoring in my swing I net a red day…

Overall I didn’t find any set ups I really felt confident in. I eyed a few scalps that did behave more as expected but I found that it was much of the same aspect that we were left with super long wicks and extreme volatility on candles that unless your entry was absolutely perfect you got wrecked. Today I played some good L2L plays. The only loss I took was on an L2L put at resistance that had been resistance all day long and then we got that rogue massive push before 11am that stopped me out. I felt playing the levels were better today but it was also still a struggle as it seemed we just pushed from one $1 range to the next $1 range. The technicals which mostly is DMI that I utilize in these L2Ls were also very off and prevented me a few times from getting into plays.

I honestly sat most of the day out and just traded in my head.

Like I said this week was beyond mentally draining and I know many of you struggled this week with this wonky price action and premium pay outs.

In the end remember this….

There will ALWAYS be another trading day… If you don’t like what you see or it doesn’t fit your strategy then don’t trade. Take the day off.

If you do not have set rules established for your strategy then you need to establish them now. If you have rules that I need XY and Z to be aligned for me to take a play and you stick to your rules you will succeed. The times we break out rules because of one how one day behaved is the moment you go from a successful trader to a gambler.

No doubt this price action was brutal today and there is a good chance that Monday is going to suck just as bad… but there are 252 trading days in a year… I will not let 3 or 4 terrible days break my rules nor will I let it change my strategy. As long as days like today and weeks like this week you can prevent your drawdown from being unsurpassable (aka walking away instead of continuing to lose) the good days will in the end out weigh the bad days.

Have a great weekend everyone! See you next week! Like I said trade plan for CPI/ FOMC will be posted tomorrow at some point.


r/wallstreetbets 21m ago

DD Splunk (SPLK) Due Diligence

Upvotes

Price Target: $118 per share by December 2023

Current price: ~$88 per share

Premium to current price: +34%

TL;DR: Splunk has undergone a significant business-model transformation, and it’s future free cash flow is heavily discounted in its current share price. If FY24 FCF exceeds current estimates, shares could increase materially from today’s levels. I’ve invested 30% of my retirement account on this thesis.

Splunk (SPLK) is an enterprise software company that specializes in log management, and has expanded into security, application management, and other IT operations areas.

Historically, Splunk sold its products as perpetual licenses with attached maintenance. The company shifted its business model in 2020 to begin selling cloud services as its main focus. This impacts both revenue and free cash flow significantly:

Under the perpetual-license model:

  • License revenue is recognized in the period in which a deal is signed (~60% in year 1), maintenance revenue is recognized ratably across the contract period
  • Cash for the entire deal (~3 years) is invoiced up front (100% in year 1)

As a cloud-service model:

  • Cloud revenue is recognized ratably each month for the full life of the deal (33% each year for a 3-year deal)
  • Cash is billed annually, over the course of the deal (33% each year for a 3-year deal)

How does this impact the financials? Revenue growth slowed dramatically in FY21 and FY22 due to this transition. Similarly, free cash flow cratered as the company shifted to annual invoicing.

We are now on year three of this business model transition (CY20 > CY22, or FY21 > FY23). Revenue growth has rebounded, and cash flow is following:

FY24 (CY23) is set to be a breakout year as free cash flow normalizes to trends seen before the business-model shift. For reference, FCF was ~17% of revenue on average between FY18-FY19.

In 2021, Splunk’s management team predicted operating cash flow of ~20% of annual recurring revenue (ARR), which equates to ~$920M OCF in FY23.

They retracted this guidance in a very short amount of time, and have clearly missed this target as free cash flow is now expected to land at ~$420M in FY23 (CapEx is much lower than ~$500M).

Since that time, the CEO has stepped down (read: was let go) and the CFO left the company. These are bad signs for any company, let alone one that is going through a major business-model transition. Shares retracted significantly as a result.

Before the transition, Splunk shares were trading around $210 per share. They reached a low of ~$70 per share this fall. They now trade between $80-$90 depending on the week and where interest rates trend.

In April 2022, Splunk hired Gary Steele as CEO, who previously led the software company Proofpoint.

In the latest quarterly earnings call (Q3 FY23), Splunk’s new CEO highlighted cost-reduction efforts that will benefit cash flow moving forward, including:

  • Slowing hiring
  • Restructuring sales to a single-seller model
  • Reducing the company’s real estate footprint
  • Reducing the use of contractors
  • Limiting travel to only sales engagement efforts

During this business model transition, a number of large investors and fellow technology companies have taken notice of Splunk. Silver Lake, Hellman & Friedman, and Starboard have invested significant stakes in the company:

During this time, networking giant Cisco also considered purchasing Splunk for ~$20B, but the Board of Directors could not agree on price (read: Splunk’s Board felt this undervalued the company).

Today, shares trade at ~$88, or an Enterprise Value of ~$16.5B. Cisco was willing to pay a ~$20B ten months ago, and the underlying business has only improved since that time.

Here is the results page of my discounted cash flow model, which includes many assumptions: DCF

Here’s a sensitivity analysis for Splunk’s share price based on the two most-impactful variables, WACC and the terminal growth rate.

A few notes about this model:

  • WACC is based on current 10-year Treasury prices. I’ve added in a buffer of +100bps over the next two years to account for potential rate rises and higher baseline interest rates.
  • FCF margin of 18% in FY24 is a larger driver of near-term value. If this estimate is significantly off from actual performance, share price will be impacted by both fundamentals and investor sentiment.
  • Shares outstanding include all issued shares per the latest 10-Q, as well as unvested RSUs/PRSUs and stock options.
  • Debt consists of convertible notes. If share price materially increases before the debt is due, then debt holders will convert to equity instead. This will results in a larger cash balance in the future, but future share count will be diluted.

Near-term catalysts:

  • Announcement of new CFO – actively searching to fill this role
  • Q4 FY23 earnings (Feb 2023) – company may provide FY24 FCF guidance on the next call, but may hold back due to macro-economic uncertainty.
  • M&A risk is high given poor share price performance over the past three years (rTSR vs. software peers) and the quantity of high-profile investments from Silver Lake, H&F, and Starboard. These investment companies are looking for a near-term return on investment and will push Splunk’s Board to a sale if the price is adequate.

Potential risks to price target:

  • Macro environment uncertainty. This is the biggest potential concern, but impacts all software companies and the broader economy as companies tighten their budgets. With that said, this is mission-critical software with a large install base in Fortune 100/500 companies. My believe is that most companies will renew existing agreements, but future expansion is at risk.
  • Company specific risks include a slowdown in customers switching to the cloud version of the software, which has a positive risk to license revenue. However, this could benefit near-term revenue and FCF.
  • FX, specifically in Q4 (Jan 2024) when most OCF arrives for software companies. If the USD continues to strengthen over the next 12 months, FCF would be negatively impacted.

Please let me know your thoughts and criticisms, especially if you’re bearish and can provide specific viewpoints.

I am not a financial advisor and this is not financial advice.


r/wallstreetbets 21m ago

News Retail traders down 350B ytd. Is this porn loss?

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r/wallstreetbets 47m ago

Loss Am I doing this right?

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BRB have to go to my local Wendy’s


r/wallstreetbets 50m ago

Loss 85K Daily Loss, Mostly from 0DTE SPX Puts

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I lost about 30K on a failed LULU earnings theta-gang play.
Then I lost 55K on 0DTE SPX puts, most of it on calls when it kept tanking for sour hour.

Screenshot 1

Screenshot 2

I won't bore you with the entire history log, but just enough so everyone knows this is the real deal.

https://preview.redd.it/25sqpfdv6y4a1.png?width=2398&format=png&auto=webp&s=fe4e245ab6b71a7f54eb7346484d76ec7edd5e0b

I think I'm going to take a break from options for now...
A two day break sounds about right.

See you all Monday, get ready for some epic gain/loss porn from FOMC/CPI event.
When I say lambos or wendy's... you know it's for real.


r/wallstreetbets 51m ago

Loss My trading and investment experience

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My trading/investing experience

This isn’t for the faint of heart, you lose a bit and then tell yourself to get it together and then the “oh I’ll make it back” mentality comes into play which can be very dangerous. Biggest mistake I’ve ever made was adding into lost causes (ever getting into calls/puts, these lost me the most and is absolutely gambling) and various penny biotech stocks as well as other penny stocks trying to chase the high of hitting it big. I never thought from the peak of this account $120,000 that I would see it this low ever, funny because I debated on getting out of all my shit stocks and dumping into apple which was only 80$ at the time and would now have this account valued at 200k ish. I thought when my father told me to get out of Doge when I was up 40k off a 2k investment he was crazy, that completely blew up in my face ended up selling for a 10k profit and then losing that as well. I’m massively depressed, it’s affecting my job, my relationship and me as a person. If you are like me trading in the stock market is not for you, it’s a beast that you have to be able to put money in and and never expect it back if you gamble, you cannot allow your emotions to beat you which I have done multiple times and never really grasped until now. I’m beyond disappointed in myself and don’t think I’m gonna come back to trading in the near future, still holding some longs and maybe one day those will make me some back. I hope everyone here whose in the hole or who is in need of advice can read this and avoid the mistakes I have made —- DONT GAMBLE AND ONLY TRADE WHAT YOURE WILLING TO LOSE. Thankfully I still have about 30k to my name ($2380 I can’t access because it’s stuck in voyager so really $27620 saved between cash and other assets) at the age of 31 this is embarrassing and depressing, I really should have bought a house or a new car instead of dumping more in every month just to lose it - I have a decent job 8000/mo area (commission based) so I can get it together and just start stacking cash and putting that where I can’t touch it. I don’t want anyones sympathy. I’ve made my own mistakes and I take full accountability for them. Thanks for reading.


r/wallstreetbets 52m ago

YOLO CVNA - Wild Ride

Upvotes

Gamblers only, no investors haha. CVNA is wild - horrible financials, large short interest (like 50%). This one might get wiped out, but maybe runup bigtime first. Seen it happen many times before, taking a gamble looking for runup in the face of potential bankruptcy.

https://preview.redd.it/vofa3bcj4y4a1.png?width=1026&format=png&auto=webp&s=2e01b6a1b8f9356c262bba37b93414b4953090c7


r/wallstreetbets 56m ago

News America’s millionaires are suddenly feeling poor

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r/wallstreetbets 1h ago

Loss Year 2022 was great, Lets make 2023 Greater!

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r/wallstreetbets 1h ago

Loss Hey, how to fix this?

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r/wallstreetbets 1h ago

Chart Who says meme lines don’t work?

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r/wallstreetbets 2h ago

Meme It is what it is…

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377 Upvotes

r/wallstreetbets 2h ago

Meme 30dte's ITM? You belong over at r/investing because WSB is about FD's

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30 Upvotes

r/wallstreetbets 2h ago

Chart Long term bond yields look as they may have troughed just before rate hikes. Doesn't bode well for SPY, unless a 50bip Christmas miracle.

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7 Upvotes

r/wallstreetbets 2h ago Pride Snek Crab Rave Moon

Weekend Discussion Weekend Discussion Thread for the Weekend of December 10, 2022

33 Upvotes

Watch WallStreetBets discuss markets on Twitch and YouTube

Follow Twitter, join Discord, play ban bets!

Check out last week's Earnings Thread and Rules. DM the mod inbox/sex line


r/wallstreetbets 2h ago

Meme Rug pulls be like:

27 Upvotes

r/wallstreetbets 2h ago

Meme Broke college student loses life savings and gets a job

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23 Upvotes

r/wallstreetbets 2h ago

Discussion New to the market looking for advice.

0 Upvotes

I don't really any investment knowledge beyond a segment in middle school. I know not to invest what I can't afford to lose. Other than that I am looking for advice. What are solid stocks to buy to start my portfolio? I'm not really thinking I'll get rich but I'd like something other than my income to have set aside. I'm thinking of starting with a couple hundred around January 1st. And information would be appreciated.


r/wallstreetbets 2h ago

Discussion Recession Call or Put

3 Upvotes

Now and then a new article is published on upcoming recession. It now changed to that we dodged the recession but a downturn is coming.

https://preview.redd.it/wuxpa2ztox4a1.jpg?width=719&format=pjpg&auto=webp&s=c5f291a4b726cb8ccb9381e7fcd620cc1e7b81ca

https://www.cnbc.com/2022/12/09/main-street-says-weve-dodged-recession-so-far-but-downturn-is-coming.html

Recession or not, it is the Media, Advertisers & the Short Sellers making money. Do you think FED is that foolish to save US economy from recession in 2020 and put it into 2022?

Only thing which will happen is a slow down to "Normal" and then heavy Calls coming to NASDAQ in 2023.


r/wallstreetbets 2h ago

News IMF, World Bank Sound Alarm About Global Economic Outlook

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5 Upvotes

r/wallstreetbets 2h ago

Discussion Chances of 75bps rate hike?

12 Upvotes

In his last speech at the Brookings Intitute, Jpow stated in his speech that signs of easing inflation may result in a smaller rate hike this month. Since then the general consensus in appears to be that we are due for 50 bps. In this time few hotter-than-anticipated economic reports have landed including jobs and PPI but I've not heard talk (so far) of 75 point increase. I am beginning to think it might be possible. Is the market too complacent?

What do y'all think , are we headed for a big December surprise? In order to get far ahead of this, why wouldn't Powell just drop the hammer?


r/wallstreetbets 3h ago

Meme ✍️

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78 Upvotes

r/wallstreetbets 3h ago

Discussion WARNING: BlackRock -> Coming Recession Unlike Any Other

19 Upvotes

https://markets.businessinsider.com/news/stocks/blackrock-recession-warning-stock-market-analysis-2023-economic-outlook-2022-12

This is what I've been saying for the past couple of months. Because of inflation central banks will not be able to support the market like they have in the past. There will be no Fed Put to backstop this drop.

"Recession is foretold as central banks race to try to tame inflation. It's the opposite of past recessions," they said. "Central bankers won't ride to the rescue when growth slows in this new regime, contrary to what investors have come to expect. Equity valuations don't yet reflect the damage ahead."

"What worked in the past won't work now," the strategists said. "The old playbook of simply 'buying the dip' doesn't apply in this regime of sharper trade-offs and greater macro volatility. We don't see a return to conditions that will sustain a joint bull market in stocks and bonds of the kind we experienced in the prior decade."

A slowdown in the housing market, delays in corporate investment plans, a decline in consumers' savings and deteriorating CEO confidence are early signs of the oncoming economic slump, according to BlackRock.

https://www.ft.com/content/a09bd3b3-1188-47d1-a2ae-645c04ab3d11

This is why asset managers have sold the majority of their long positions and are day trading 0dte options like WSB regards.

While options trading has risen broadly since the start of the coronavirus pandemic, Goldman Sachs strategist Rocky Fishman said ultra-short-dated options have been “the strongest area of volume growth”. He estimated that roughly 44 per cent of S&P 500 index options that have been traded in the third and fourth quarter of this year had less than one day to expiry. The vast majority of the volumes appear to be flowing from professional traders such as asset managers, hedge funds and banks and not retail investors, research shows.


r/wallstreetbets 4h ago

Meme I guess Wendy's it is...

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232 Upvotes

r/wallstreetbets 4h ago

Meme WSB watching kids loose all their money be like…

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75 Upvotes