!!! ↘︎ Multi-day Streak(period): No Santa this Christmas ↘︎ !!!
Updated
✺ End of Bulls rally after the most successful trading day since April.
✺ The possibility of the Goldilocks scenario - is it on the horizon?
✓ PPI data has been reported today.
Key fact: "Firms no longer optimistic"
SPX500
After the longest period of growth in 2024, the market closed at -0.41 rate, putting the end to the robust bulls rally since the last week. The PPI report came out during the pre-market hours. The result, from the surface was seemingly positive from market perspective. Although, always the detail is the devil.
The overall result came out in favor of regular consumer, seeing drastic decrease in manufacturing cost in total: (Processed goods for intermediate demand) Prices for processed goods for intermediate demand moved down 0.9 percent in October, the largest decrease since falling 1.6 percent in May. Leading the October decline, the index for processed energy goods dropped 4.3 percent. Prices for processed foods and feeds decreased 0.4 percent. In contrast, the index for processed materials less foods and energy advanced 0.1 percent. For the 12 months ended in October, prices for processed goods for intermediate demand fell 4.5 percent.
The largest contribute to the odds was the transportation and warehousing which increased for about 1.5 percent. The warehousing and transportation contains various subjects from regular staffing needs to delivery of goods, signifying that the era of pandemic is yet remain in the market.
The Empire state manufacturing Survey begins with the headline, "Firms No Longer Optimistic," as the future business conditions index plunging from twenty-four points to -0.9, the lowest since 2022. Troublesome in logistics with increased unfulfilled shipment, lacking number of employees, decreased employee work hours, signifying operational challenges residing within the industry. Facing these resilient challenges, business have forecasted in contrast to market's optimistic expectations: General business conditions from twenty-three to -0.9 followed by decreased number of new orders, increased unfilled orders and shipments, lacking performance over all.
Back to the graph, here are some key price-lines for the rest of this week onSPX500 (red lines):
1. Bull $4506-4521 (Largest volume allocated for the last 5 days)
2. Bear $4393.66-4360 (Largest volume allocated since Oct 28th)
With few significant leaps in the previous week and this Monday, the market might have fooled us by acting as if these were the clues as to guarantee the potential end of the year rally.
With big CPI report and lots of unexpected positive earnings from larger tech firms and overall, we were able to get through the $4393 resistance level without a hurdle, and it seems that we just ran out of those events to create the unexpectencies to get us through the new high. Plus, the Inverse U-shape pattern is one of my favorite along with Inverse W-pattern (or Double top), and as large the previous leap was, this down trend will also be way much more accelerated with higher velocity than which we anticipated.
We all know that demand is the driving factor of the market, but without the proper level of supply to meet the market needs, will only cause higher inflation, simply will lead to another rate hike from the fed. I think today's inverse trend was only the smallest part portraying the fear residing beneath the surface.
✺ The possibility of the Goldilocks scenario - is it on the horizon?
✓ PPI data has been reported today.
Key fact: "Firms no longer optimistic"
SPX500 After the longest period of growth in 2024, the market closed at -0.41 rate, putting the end to the robust bulls rally since the last week. The PPI report came out during the pre-market hours. The result, from the surface was seemingly positive from market perspective. Although, always the detail is the devil.
The overall result came out in favor of regular consumer, seeing drastic decrease in manufacturing cost in total: (Processed goods for intermediate demand) Prices for processed goods for intermediate demand moved down 0.9 percent in October, the largest decrease since falling 1.6 percent in May. Leading the October decline, the index for processed energy goods dropped 4.3 percent. Prices for processed foods and feeds decreased 0.4 percent. In contrast, the index for processed materials less foods and energy advanced 0.1 percent. For the 12 months ended in October, prices for processed goods for intermediate demand fell 4.5 percent.
The largest contribute to the odds was the transportation and warehousing which increased for about 1.5 percent. The warehousing and transportation contains various subjects from regular staffing needs to delivery of goods, signifying that the era of pandemic is yet remain in the market.
The Empire state manufacturing Survey begins with the headline, "Firms No Longer Optimistic," as the future business conditions index plunging from twenty-four points to -0.9, the lowest since 2022. Troublesome in logistics with increased unfulfilled shipment, lacking number of employees, decreased employee work hours, signifying operational challenges residing within the industry. Facing these resilient challenges, business have forecasted in contrast to market's optimistic expectations: General business conditions from twenty-three to -0.9 followed by decreased number of new orders, increased unfilled orders and shipments, lacking performance over all.
Back to the graph, here are some key price-lines for the rest of this week on
SPX500 (red lines):1. Bull $4506-4521 (Largest volume allocated for the last 5 days)
2. Bear $4393.66-4360 (Largest volume allocated since Oct 28th)
With few significant leaps in the previous week and this Monday, the market might have fooled us by acting as if these were the clues as to guarantee the potential end of the year rally.
With big CPI report and lots of unexpected positive earnings from larger tech firms and overall, we were able to get through the $4393 resistance level without a hurdle, and it seems that we just ran out of those events to create the unexpectencies to get us through the new high. Plus, the Inverse U-shape pattern is one of my favorite along with Inverse W-pattern (or Double top), and as large the previous leap was, this down trend will also be way much more accelerated with higher velocity than which we anticipated.
We all know that demand is the driving factor of the market, but without the proper level of supply to meet the market needs, will only cause higher inflation, simply will lead to another rate hike from the fed. I think today's inverse trend was only the smallest part portraying the fear residing beneath the surface.
Note
Still kept my expectations are consistent.Double top at the moment. One huge sell-off event will give a clear instruction on Bear signal.
Note
High 4835.5
Low: 4111.5
Key issue:
1. Black friday sales impact on corporate sales
2. Decreasing Consumer confidence impact on stock market.
3. WIll 30-year mortgage continue to decrease from time to time?
From the latest Costco and other Wholesale distributor earnings, we had concluded the major shift in consumer preference in spending from bulk save to preference in discount (low face value).
Average household income and spending just crossed over in the last report. With increased Holiday spending, we do assume some manipulation in the reported data. Although, yet, higher optimism is captivating the current market.
Note
Market vs Economy.
How far can we go?
Beyond expected range, the market experienced the strongest record breaking rally through the last few months.
Geopolitical events do seem quite concern as North Korea also joins the War-trend with their recent propaganda.
Higher cost(Rate) is doing its job. Slowdown in Supplier market, slowdown in jobs market. ISM service PMI indicated growth by 0.9 points compared to its previous month report. Although, a significant slowdown has been spotted in Factory orders and transportation. Slowdown in industrial labor market, which is the largest employment pool in the united states, it is the first signal of easing in the Bulls rally.
Note
The falling commodity(Crude oil, Natural gas, etc..) price, yielding jobless claims and employment data turning in the favor of Fed to lower interest rate as we get closer to the election year.
A temporary fear had erupted the market as Powell warned public not to take the cut as guaranteed yet in his latest speech.
We are more than likely to see another hike in SPX at least for a few days until the next FOMC which is on 12/15.
Note
Unbelievable.
How resilient the market can be?
Fed Interest rate has been the major concern of the market so far, until today.
With the unexpectedly lower unemployment rate, finally, we are seeing a good news as a good news. Market had bought the benefit of a stable job market over the fear of another interest rate hike.
It will be absurd for the Fed to either increase or decrease the rate at the given time. Any of the choices will only make the situation worse. I believe they will keep the interest rate at the current level until the next meeting.
Now, with the current better than expected economy, will the consumer be able to keep spend? It looks like the market is assuming so. Steady Job market, Good news is a good news.
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