Hello Recession! How are ya?

Wasn't going to post a new idea, but I think this merits a little FYI, just be aware type post.

So, if you haven't read the news, First quarter GDP decline 1.5% and plenty of unemployment claims. This surpassed expectations and this actually, by definition (when looking at the USA's past 2 GDP results), brings us to that nasty little R word. Recession.

Tomorrow we get the inflation PCE release thing at I believe 8:30. So we will see what that says. I am not sure if this will be addressed but by the looks of things, the market has already taken notice. Futures has lost a lot of stamina.

BTC is running out of steam, and its getting close to just tanking out of its little wedge thing. It looks like its a little tired:

I re ran time series modelling for both SPY and DIA. So yeah, I think tomorrow will be the day I will maybe start re-building a short position on SPY again. Reasons being:

- SPY Affirmed its weakness today with its inability to break a newer higher at EOD
- SPY failed to hit my EOD calculated bullish target despite it breaking its bullish break. This is generally a sign of impending weakness and decline.
- SPY remains heavy heavy heavy.
- VIX and UVXY have not moved. They remains quite elevated. Albeit this is mostly because, despite SPY appearing bullish today, overall the market remains extremely volatile and UVXY and VIX capitalize on volatility , not SPY selling off.
- Time series modelling look fantastic and 371 is on the horizon.
- SPY brought itself out of deep oversoldness and now rests in the higher -1 SD range on the ZScore (Again manually calculated Zscore, not Zscore indicators).
- Worsening economic conditions.

Math projections for tomorrow are neutral but slightly resting on the bullish side. But, I am not going to share the exact details only because I do not consider math targets for sentiment when there is big news being announced and when that big news is going to be horrendous. This completely messes with the efficacy of the statistical tool I developed, so there is no point in sharing it or relying on it in this particular circumstance. Stats is fantastic but it unfortunately does have its limitations.

But I will give you the most important math targets that will not change regardless of what happens. That is the bullish and bearish break.
Bullish break is: 408
Bearish break is: 401

Play it by ear. Be careful, tomorrow will probably be wild and annoying. I mean, the whole year has been annoying. But yeah, tomorrow will likely particularly be wild and annoying.

Just my thoughts, not advice. You need to follow your own plan, etc. etc. etc.

Feel free to share your comments/thoughts/questions and criticisms below.

As always, thanks for reading and safe trades.

OH and someone requested an updated on the time series targets etc. I will probably do a full time series update over the weekend for myself, and I can share the charts and results on here. So, I guess stay tuned for that.
Comment: WOOOO! Crazy day!!

I am actually happy with the results. I would have been happy with it selling off, too, but I am incredibly happy with seeing this totally bring itself out of the deep oversold region! We have some excellent stabilization of SPY going on and I am SUPER happy to see SPY finally committed to something.

If you kind of remember, I was saying that we would really need to see SPY have a nice bullish close and that close would need to be over the 400s for this to bring itself away from the negative Standard deviations.

Haven't seen where we currently sit now based on today's close, but this will be part in parcel of my analysis I will post at some point this weekend along with revised time series analysis.

Enjoy your long weekend everyone!

Hope all of you that traded are starting your long weekend happy and green =).

Take care!

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