Finding Profits in the Calm

THE WEEK

The Market was less volatile than I had anticipated.  There were major economic announcement on Wednesday – the CPI (Consumer Price Index) and the FOMC decision on interest rates.  The Market did gap up on the CPI announcement which happened prior to the opening of the Market.

The FOMC decided to hold interest rates for now.  That announcement and the subsequent press conference barely caused a price ripple.  I believe we all expected interest rates to hold where they are.  Powell is determined not to let up until 2% inflation is well established.  He feels in the past high inflation periods, the committee bowed to political pressures and lower rates far too soon.

I had predicted in January that interest rates would not be adjusted down until the November meeting.  I am going to stick by that prediction.  Although some of Powell’s statements in the press conference made me a little nervous.  He is not going to take his ‘foot off the gas” until the economy is where the FOMC wants it to land.

LOOKING AHEAD

Next week I believe the Market will be quiet and calm.  There are not many earnings announcements.  In fact, using the metrics I favor, I have only one earnings announcement to watch – Kroger (KR).  Wednesday is a national holiday – Juneteenth – and the Market will be closed.  On Friday the PMI data for May is released.  But I feel its impact will be minimum.  All told, I am expecting the Market to continue to rise with very gentle increases day-by-day.

HOW AM I DOING?

It was a good week for me.  I actually prefer a quiet Market.  I utilize a trade that consistently  brings in very good returns in this kind of Market – credit diagonal spreads.  I like the trade because it doesn’t require a lot of babysitting.  The drama of the last four years has worn me out.  I’m now ready for some “boring” trading.

The next heavy Earnings Announcement season starts in about 5 weeks.  I feel Credit Diagonal Spreads will work the best over the next month.  That’s the subject I picked to cover in this week’s webinar on Thursday.  I also will be reviewing the differences in credit and debits spreads as requested by one of Millionaire Club subscribers.

Next Thursday Webinar

Delving into Spread Spreads and Why Credit Diagonal Spreads in this Market