We just had FOMC.
"Inflation just as bad as the start of the year"
"Less chance of soft landing"
"We are ok with over tightening because we have tools"
"Too early to even think about talking about a pause"
"We have powerful tools for the hot labour market to make it soft"
The Economy is breaking.
- Fed needs to kill inflation.
- Fed is measures future (core) inflation by looking at employment.
- Jobs are still strong. Practically, look at XLE, all those oil jobs.
- That said, fed can only deal with demand side inflation and has no plan for supply side inflation.
- Supply side inflation is the real problem and is controlled by OPEC...
Or is it ?
4200 was the bottom of pricing in QT.
4000 was the bottom of pricing in Inflation.
3700 was the bottom of pricing in recession.
We have solved inflation and recession. so we should hit 4200. 4250 is the VWAP from the high. 4300 has lots of dead buyers.
"Solved" I think we can have earning misses in Q3 earnings.
SPX went to the gap, and failed. as predicted. A complex top and test of the 50 SMA is possible. That said, with earning and FOMC next week, grows less likely. A failure of this rally could get bloody, fast.
Market hanging on by a thread.
- After testing overnight lows, we had a reversal of market internals (UVOL / DVOL, TICKS, Breadth) and rocketed higher closing the day in the highs.
- PCC gave a buy signal mid day, VIX Ratio almost gave a buy signal.
- My take away is we should bounce here, but we need to look for a failure near the daily SMAs (20, 50, 100,...
Every trader worth their salt needs to trade in at least one crappy biotech.
I say trade, but chances are you will end up an investor... just like those guys who bought at $100.
AXSM has a very nice pipeline. The drop was due to incorrect FDA filing. Perhaps the clean up their act and release some drugs for all the kids (and elderly) to enjoy.
I was meditating on the container ship issue. The root issue is China does not need raw materials for construction, because they overbuilt. Theis is due to the evergrande situation, and the collapse of their real estate sector.
Their alternative to real-estate was tech, specifically the Digital Yuan. The problem was it was bad, really bad. Instead of making DY...