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Morning, team! Upon your letter writer’s return next week from the World Economic Forum in Switzerland, the more in-depth letters will resume. We’ll keep it brief with some perspectives to mull amid the recent market relief.
In short, recent “euphoria might be premature,” said Fabian Wintersberger. Even if the economy has a mild recession in the first half of the year, there is not much reason for the Fed to pivot.
This perspective is supported by ex-Fed trader Joseph Wang. Wang believes wages rising, coupled with a large “credit boom” in the banking sector, bolsters inflation, and this may lead to rates higher for longer, a market pressure.
If there’s a severe recession, “the current expected corporate earnings are too high,” and adjustments would be an added pressure on the markets Wintersberger noted. Bloomberg’s John Authers echoed Wintersberger’s remarks. Profit expectations are the “biggest contrary indicator to the burgeoning optimism.”
As of 3:40 AM ET, Tuesday’s regular session (9:30 AM – 4:00 PM ET), in the S&P 500, is likely to open in the middle part of a negatively skewed overnight inventory, inside of prior-range and -value, suggesting a limited potential for immediate directional opportunity.
Our S&P 500 pivot for today is $4,011.75.
Key levels to the upside include $4,028.75, $4,045.75, and $4,061.75.
Key levels to the downside include $3,995.00, $3,965.25, and $3,943.25.
Click here to load today’s key levels into the web-based TradingView platform. All levels are derived using the 65-minute timeframe. New links are produced, daily.
As a disclaimer, the S&P 500 could trade beyond the levels quoted in the letter. Therefore, you should load the above link on your browser for more relevant levels.
Volume Areas: Markets will build on areas of high-volume (HVNodes). Should the market trend for long periods of time, it will be identified by low-volume areas (LVNodes). LVNodes denote directional conviction and ought to offer support on any test.
If participants auction and find acceptance in an area of a prior LVNode, then future discovery ought to be volatile and quick as participants look to HVNodes for favorable entry or exit.
POCs: Denote areas where two-sided trade was most prevalent in a prior day session. Participants will respond to future tests of value as they offer favorable entry and exit.
MCPOCs: Denote areas where two-sided trade was most prevalent over numerous sessions. Participants will respond to future tests of value as they offer favorable entry and exit.
In short, an economics graduate working in finance and journalism.
Capelj spends most of his time as the founder of Physik Invest through which he invests and publishes daily analyses to subscribers, some of whom represent well-known institutions.
Separately, Capelj is an equity options analyst at SpotGamma and an accredited journalist interviewing global leaders in business, government, and finance.
Past works include conversations with investor Kevin O’Leary, ARK Invest’s Catherine Wood, FTX’s Sam Bankman-Fried, Lithuania’s Minister of Economy and Innovation Aušrinė Armonaitė, former Cisco chairman and CEO John Chambers, and persons at the Clinton Global Initiative.
Direct queries to email@example.com or Renato Capelj#8625 on Discord.
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Do not construe this newsletter as advice. All content is for informational purposes.