!!! ↘︎ Multi-day Streak(period): No Santa this Christmas ↘︎ !!!✺ 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"
BLACKBULL: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 BLACKBULL: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.
