Republic Risk: Four Months In... Beating the S&P 500

We are content with the run so far, and thankfully ALTM is waking up a little. But we still have work to do. Let's dig into sector strength ahead of the Fed meeting.

Equity Storm Watch Is GREEN on the S&P 500 and YELLOW on the Russell 2000

Again, I’m not expecting too much ahead of the Fed announcement. Algos and funds are setting up their plays ahead of time. However, this week will largely come down to the terminology of Powell’s speech. That said… there is now far more downside to this market in the wake of stealth selling and removing hedges among CTAs leading up to Wednesday’s event. In addition, there are growing concerns that the recent wave of government hirings (the only thing propping up our recent jobs reports) is driving more wage inflation in Q1. We continue to urge extreme caution in this environment. 

What to Do Today: Look at your current positions and ask - if the market were to scream higher for reasons we can’t explain - at what percent gains would you be content? You should consider this while selling calls (covered calls) on positions. If you sell calls and the stock prices surpass the call option strike price, you will take gai…