Slowing Economy Emboldens Bulls
Jobless Claims dropped, as did GDP.
Translation: Employment backdrop is still strong.
Wage Inflation Delays Recession.BUT US 2Q GDP index revised lower to 1.7% (not 2% EST). That caused USD to pull back as 10Y softens a bit with oil on economic growth slowing.
Irony: Market pricing in Fed cuts again premarket until it realizes ECONOMIC GROWTH IS SLOWING.…As mentioned before I closed my trading room:
Bounce in play to 429/430 to wipe out all those short-duration puts that were added. Brilliant!
As long as SVXY is green, so too will market. Crude needs to come back down and stay down below monthly 93.50 resistance to confirm slowing economy. The 10Y yield almost tagged my 4.7% call from over one year ago for this year.USD softened but I suspect we still see $107.22/108/110 in the not so distant future. This higher surge in yields big picture will cause one of two things:
1) emerging market panic and FX volatility (weekend risk kinda thing),
OR
2) rejection on slowing growth data that pulls down dollar + yields enough to give bonds and stocks a bounce.We may not hit 4200 let alone 4210 by Friday but we hit my 4241 … so I’m happy. We will hit lower with 4073 gap fill in time. I thought we would have THAT STRONG BOUNCE at 4200 like we did yesterday. Today what we got was my long awaited GLD wkly gap fill.Almost as if they’re selling gold off hard (silver next) to buy stocks and bonds! My RISK OFF USD/10Y indicator has dumped from 310 to below 305 but we are not out of woods until it can get back/stay under 300.
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