US Weekly Fundamental Recap & macro thoughts
This week we saw some interesting indicators start to decline.
In industry: More volatile PMI manufacturing saw further pull below 50 while PMI services have now just crossed the threshold. PMI services has only crossed below 50 during a few periods in the last 25 years.
Labor markets Labor statistics continue to remain fairly static. They are expected to weaken as the federal funds rate continues to inch higher, at least slightly, while easing is still moderately applied.
Thoughts
Zooming out to a broader look ahead I believe we will be back to visit 2019 lows, at a minimum. Best case we see a retest of a long supporting moving average at a point CPI Y/Y and banking rates are both heading in the right direction. If this were to play out there would be an addition 30-35% pullback in the NAS/US500 while these metrics return from their hopeful extremes. Worse-er case, we lose the monthly 100 EMA and slip back to erase 9-12 years of "industry" gains (or to present a wonderful buying opportunity @ ~85% discount!).
The timing is everything with this one, when do we approach that price area. Sooner is not better for its strength IMO. If we see confluence between the NAS Monthly 100EMA, CPI / rates sub 4%, bond bounce back, US dollar off its bully run yadda yadda - all in.
If we get there too soon; before rates have stabilized or begun their decline, CPI is continuing to gap target significantly, the DXY is on the rise / holding ect - that EMA will become a good resistance for my short entry.
Happy trading - stay agile
In industry: More volatile PMI manufacturing saw further pull below 50 while PMI services have now just crossed the threshold. PMI services has only crossed below 50 during a few periods in the last 25 years.
Labor markets Labor statistics continue to remain fairly static. They are expected to weaken as the federal funds rate continues to inch higher, at least slightly, while easing is still moderately applied.
Thoughts
Zooming out to a broader look ahead I believe we will be back to visit 2019 lows, at a minimum. Best case we see a retest of a long supporting moving average at a point CPI Y/Y and banking rates are both heading in the right direction. If this were to play out there would be an addition 30-35% pullback in the NAS/US500 while these metrics return from their hopeful extremes. Worse-er case, we lose the monthly 100 EMA and slip back to erase 9-12 years of "industry" gains (or to present a wonderful buying opportunity @ ~85% discount!).
The timing is everything with this one, when do we approach that price area. Sooner is not better for its strength IMO. If we see confluence between the NAS Monthly 100EMA, CPI / rates sub 4%, bond bounce back, US dollar off its bully run yadda yadda - all in.
If we get there too soon; before rates have stabilized or begun their decline, CPI is continuing to gap target significantly, the DXY is on the rise / holding ect - that EMA will become a good resistance for my short entry.
Happy trading - stay agile
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