Ascending Wedge Breakout - Plan for Failure
Updated
Nasdaq broke out of an ascending wedge to the upside beginning of june, and I'm seeing some signals that a correction might start as the markets are way out of whack with "main street." The data doesn't make any sense, even Jpow said that the employment data doesn't seem accurate.
Whatever is happening, just talking to people show that the narratives in the data don't line up with the reality that people are experiencing.
M2 started to contract +12 months ago, and it takes about that long for monetary policy to start to show effects.
Meanwhile the bond market is showing that the rate cut bets are moving. Yields are rising and the CME fedwatch tool is showing that the market's bets on the rate cut probabilities for the year are shifting down.
PMI came in hot today which shows some level of increasing orders, but also inflationary pressures. The Fed still hasn't cut. Consumer credit card delinquencies are starting to rise. The US added another 384 bn to the deficit in May. No way the fed will move with that government spending, it's just that the CPI and PCE data seems to be off of what's really happening.
If the fed cuts, it'll probably be fast and hard. I'd pay attention if they cut/when they cut. If they cut 50bps especially I'd run for cover.
We'll see what happens, I'm looking for some signals in risk asset to find a short to hold. Always hard to hang onto the short positions, the options cause zig-zagging so when I see it, I'll wait for a huge spike and try to hold it down.
Whatever is happening, just talking to people show that the narratives in the data don't line up with the reality that people are experiencing.
M2 started to contract +12 months ago, and it takes about that long for monetary policy to start to show effects.
Meanwhile the bond market is showing that the rate cut bets are moving. Yields are rising and the CME fedwatch tool is showing that the market's bets on the rate cut probabilities for the year are shifting down.
PMI came in hot today which shows some level of increasing orders, but also inflationary pressures. The Fed still hasn't cut. Consumer credit card delinquencies are starting to rise. The US added another 384 bn to the deficit in May. No way the fed will move with that government spending, it's just that the CPI and PCE data seems to be off of what's really happening.
If the fed cuts, it'll probably be fast and hard. I'd pay attention if they cut/when they cut. If they cut 50bps especially I'd run for cover.
We'll see what happens, I'm looking for some signals in risk asset to find a short to hold. Always hard to hang onto the short positions, the options cause zig-zagging so when I see it, I'll wait for a huge spike and try to hold it down.
Note
There is the huge spike!
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