Air Pocket Of Risk Engaged
Perfect Storm of Profit Taking Post Powell Pouting, Kennedy Disrupting, AMAT Slashing into MOPEX Monkey-Business.
»CLUB/EDGE client post November 16th, 2:40 PM ET.
“The concept of surviving on average is irrelevant. You have to survive every day. Which means, really, that you have to survive on the bad days.” Howard Marks
Perfect Storm
Popping in to say: Good economic data this morning.
Joseph Brusuelas (emphasis mine):
USUS Retail Sales: lots of noise inside the October retail data due to the Hurricane & the large upward revisions to the September data.
When one gets such data it’s far better to look at the three month average annualized pace. The topline showed a 5.3% pace where as the control group which feeds into the estimate of GDP eased to 4.6% from the 5.7% previously.
One should expect a big increase in building materials in the November data as reconstruction in the southeast following the hurricanes shifts into high gear.
Given a solid jobs market & 18 straight months of wage gains above inflation US households are well positioned heading into the holiday spending season.
This is good news for the economy but bad news for rate cut expectations.
And this data followed the double whammy of Powell pouting and Kennedy appointment to HHS Thursday - see THE MAHA TRADE.
I wrote about both, so you already knew I expected we could bleed Friday.
In THE POWELL PAUSE, I wrote for SPX 6012:
Below is LRE (low risk entry) short for 5936 then 5878.46 then 5783.44 with overshoot to 5750.
With AMAT reporting/disappointing this morning as well, with revising lower or 'normalizing for China sales', semis have sold off into a MOPEX Friday (monthly options expiration).
With RFK Jr gunning for big changes in healthcare space, the combined affect of all the data this morning was a Perfect Storm for more selling in healthcare/biotech weakness and semi/big tech weakness.
»As I also discussed live/prior posts, selling under the surface started TUES at 11AM so the air pocket of risk was forming.
AND TODAY HAPPENED.
With that, AMZN is back to $200 for those who missed the breakout ;0(.
XLV just hit 142 nearly erasing this year's gains.
SPX short has blown through 2 of my 4 price targets.
QQQ is almost at #4 PT: 492.88
SMH will likely be a great bounce play at the 200D
Hans options-mentor-hans and I warned we weren't doing much this week when we met Wednesday for our Macro-to-Micro OPTIONS Power Hour. Plus I expected a pullback Friday morning. So here we are.