[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] Market radar is strongly honed in on the bond market right now. Whether it breaks to the upside or downside will likely be a major determining factor in terms of sector leadership in the stock market. Will growth, tech, and communications continue to outperform or will we start to see the inflation trade reignite in coming weeks?

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] One of the sources of fuel for a market rally is volatility selling. However, it’s the selling that ultimately leads to the last squeeze higher before the fall. Looking at term structure of volatility and skewness is a way to identify volatility expectations and hedging. Over the past few days, these vol-based indicators have been the most bearish since mid-December of last year. As NVDA retests it’s all-time high, this may be a warning to take profits before the next correction.

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] I’ve been absolutely pounding the table on this for more than a week now. The correlation between Big Tech market leaders and the S&P 500 is getting stronger, not weaker. And that means a correction will be knocking on the door any second now. Higher SKEW and much lower volatility points to that. Low options volumes point to that. The gamma squeeze trade is dones-ville. It’s all pointing toward change – or trouble, if you’re not prepared. Let’s look at what it could take to get us all the way there – and what we should do about it in the meantime. Last week’s five-day expected move was 81.08 – we’ll look at how we did and what we can expect next week. We’re also going to look at a couple of specific stocks I think back me up –

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] The infamous Fed Dot Plot showed most committee members are forecasting three rate cuts in 2024. For those of you who’ve been hiding out in the woods since 2009, rate cuts can act like rocket fuel for many, many stocks… and poison for others. And we could get three hits of it this year. And this isn’t counting 2025. So we’re going to look into three sectors that will be rocked up (and down) by cheaper money, and three specific stocks in each sector to trade. I’m looking at a commercial REIT in the data center segment, a bearish play on a financial that can’t rally with its sector-mates and a tech stock operating in the Cloud, the “Internet of Things” space and, you guessed it, AI. There’s a lot to get through here, so let’s get started…

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] Another Fed Day has come and gone… and what a dud. Not only has the S&P 500 fallen off its daily highs, but – big picture – the central bank has completely failed to curb inflation. That’s despite all the cheerleading they’ve done over the past, I dunno, three years. More to the point, that increasing correlation between the big tech mega-caps and the S&P 500 I’ve been calling out is… still increasing. That’s going to lead to a big change in the market. The buy-happy crowd that’s been gobbling up inflated assets at ridiculous prices is probably going to get wiped out. I’m not just ranting – I’ve got the proof right here…

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] We’re seeing some powerful sector rotation just under the surface of the market… There are huge opportunities to profit now in energy, basic materials, the industrials, and consumer staples. That’s the good news. The perhaps-not-so-great news is that we’re now seeing the kind of price action typically witnessed in later stages of the equity market cycle. That means we might be getting closer to the end of it all. And just to make it interesting, Fed Chair Jerome Powell and the FOMC will give remarks tomorrow afternoon. While no one is seriously betting on an imminent rate cut, an overly hawkish tone could throw a couple of swimming pools’ worth of cold water on the bulls. Let’s look at this from all the angles right here…

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] Word that Apple might let Google play with its powerful Gemini AI product sent both stocks strongly higher today; GOOG gapped up more than 4% by late in the day. AI is once again providing the rocket fuel for liftoff. The S&P 500 is pushing toward new all-time highs… but the FOMC will release a policy statement Wednesday in an environment that’s still stubbornly inflationary. So there’s a lot of potential for volatility, to put it mildly. That’s got big-money institutional traders reaching for their preferred hedges. The dot plot thickens… We’ll talk about exactly what this means and how we can turn it to our advantage right now. Watch…

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] “The correlation between the Big Tech stocks and the rest of the S&P 500 is low, compared to history,” says a recently published Barclays note. I kind of agree. The big guys are right once in a while. But the note goes on to say that Big Tech/S&P 500 correlation actually spikes when markets sell off. That sounds like trouble to me, particularly because I see us on the edge of a volatility breakout. We’re seeing a monster, inflationary rally in stocks right now, with so many names stuck near 52-week highs. Investors are just plowing ahead with no worries about anything. It’s like fear has disappeared from the markets entirely. The VIX has, with a couple of exceptions, been in the basement for weeks and bonds are hovering near lows – a sign that the market just doesn’t give

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] Few things can hit the market as hard as the American consumer’s mood. The impact isn’t always direct or proportional or even immediate, but it touches almost everything, and many stocks virtually live or die by consumer sentiment. Last week we looked at what sentiment will do for… and to… Costco. This week, we’re going to get into another bellwether stock, Nike, which pulled in $51.5 billion in revenue last year. Nike’s going to report earnings a week from today, so let’s see if we can connect the dots and predict what Nike’s upcoming report is going to look like, and what we can expect from the stock. Let’s get started…

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] Everything’s got an expiration date – milk, bread, bananas… and derivatives. This Friday – day after tomorrow – we’ll see stock options, index options, and index futures worth trillions all expire on the same trading day. It’s called “triple witching,” and if for some reason you’ve never been through one before, you’re in for a ride. Buckle up. Triple witching happens just four times in a year, and we can see volume and price go crazy, especially in the last hour (or so) the markets are open, as traders try to get themselves set up