Thrift Savings Plan (TSP) C-Fund SPX: Technical: very dizzying two weeks as we see price bounce between that 8/25/22 supply zone and support between 4060 and 4100 but the lower highs and lows still have me inclined to remain on the defensive by maintaining my core position in the G-Fund. 4047.95 provide support today in an after lunch rally that had us close at 4079.10. Now, while it certainly leaves a lot to be desired for by bulls, who would have rather seen a reclamation of 4100, that bottom wick shows that there is still money on the sidelines pouring into the dips. Reclamation of 4100 sets this up for another go at punching through the supply zone and, if it does, I don’t see much of an obstacle to 4300. Basing at 4100 would compel me to move back in from the G-Fund. Of course, if 4100 does a support/resistance flip, rejection would bring it to 3908 areas where we observed a bullish order block. Loss of 3908 would likely lead to the 3800s where we would have to observe reaction to a weekly order block.
Macro: we’ve had a few alarming reports these past few weeks: CPI, PPI, Retail Sales all came in hotter than expected. Compound that with low unemployment and recent articles showing that we have an unprecedented level of credit card debt with increasing delinquency, I see a good possibility of the following scenario: Interest rates sticky and made worst by Fed’s attempt to engineer a soft landing. This will prompt a more aggressive hike and/or longer rate cycle. Fed members have already given a nod to a 50 BPS rate hike, instead of the expected 25, in the next FOMC. This restrictive monetary policy would due its job at slowing the economy down but increase unemployment. More people unemployed, less money to pay back credit cards and other loans. Finally, this causes the credit bubble to pop, crashing the markets.
Macro: we’ve had a few alarming reports these past few weeks: CPI, PPI, Retail Sales all came in hotter than expected. Compound that with low unemployment and recent articles showing that we have an unprecedented level of credit card debt with increasing delinquency, I see a good possibility of the following scenario: Interest rates sticky and made worst by Fed’s attempt to engineer a soft landing. This will prompt a more aggressive hike and/or longer rate cycle. Fed members have already given a nod to a 50 BPS rate hike, instead of the expected 25, in the next FOMC. This restrictive monetary policy would due its job at slowing the economy down but increase unemployment. More people unemployed, less money to pay back credit cards and other loans. Finally, this causes the credit bubble to pop, crashing the markets.