OPEC+ providing Fuel for Short SqueezesEU is in Turmoil.
British are rolling over.
China just shrugging it out.
Elon caught with his hand in the cookie jar.
CPI next week.
Election Next Month
But it's all about the Oil.
Expect positive correlation to last about as long as the next CPI print.
Oil blasts higher -> CPI prints higher -> Indexes enter Second Leg Down.
2ndleg
Mission AccomplishedI miss the days when presidents would visit an aircraft carrier and declare their mission has been accomplished.
I guess you can say Jerome Powell has accomplished his mission by returning the S&P to its 10 year trend channel when he turned hawkish back in January.
See my Bear Case for January Analysis I posted below.
This chart is an update for one of my 2021 charts on the same that clearly shows the effect QE on VS QE off.
So where do we go from here?
Sauds gave Biden a big sike to hiking oil production.
Increasing tensions with China over Taiwan.
The days when all we had to worry about was Oil, now its Oil and Sand.
Its going to be a cold winter.
Wait until next spring when there is a global fertilizer crisis.
FED is going to need to continue to hike.
Jobs are going to increasingly get scarce.
House prices will start turning over at increasingly greater rate. people with 2 yr fixed is starting to roll over now, 3 yr next.
Sorry Cancel Culture. Your future has been Cancelled.
Are you ready to move to the 2nd notch on the belt?My overall outlook on the market is still Bearish.
There are still so many signs the world economy is in for one hell of a recession.
The 10y2y is still in free fall ever since the leading indicator of a hedge fund collapsing began.
DXY is still showing support at 105 breakdown line.
The VIX continues to compress with higher lows and lower highs.
FED debt continues to climb at a break neck pace. The next Debt Ceiling crisis is not far away.
SKEW is pinned at 120 even though VIX is retiring to pre-russian invasion levels.
This loosely translates to funds not being hedged properly for a 2nd Leg Down.
The street is looking for fed hikes to peak at 75bp and ease into the fall.
What happens when the FED is forced to do 100bp because inflation will not sit in the corner.
Nobody puts baby in a corner.
Don’t even get me started about Jobs or the Housing / Wood markets.
I give this Short Squeeze fueled rally until the Aug 10th when the next round of CPI comes out.
I still expect SPY to test the 200D moving average and maybe a look at 420.69 just to trap every last bull.
Those bulls like Bill Hwang are skittish, but seeing the shenanigans pick up with HKD is a stark reminder of how this mess all got started in the first place.
Never Financial Advice, Always 1 card short of a full deck.
A Decade of DebtIt felt like yesterday that Obama Care was the biggest concern on everyones minds.
After 1.4 Trillion in healthcare spendings in 2021 and COVID pounding on weaker baby boomer populations has driven total debt into a parabolic upwards trend.
War is festering in Ukraine, Wars get expensive.
EU is on the brink of an Energy Crisis unlike anyone has seen before.
Battery and Solar are incredible expensive and low margins.
Practical thinking would suggest this is not sustainable.
Inflation will continue, debtors gain from inflation because they are repaid with dollars that are worth less.
If you think this past weeks Bear Market rally marks the end of inflation fears and rising interest rates, think again.
This easing of market conditions can therefore only be temporary and only serve to provide fuel for a second leg down.
Peak formation in a descending channel We have a trend line structure in this setup, a descending channel. On the 240, we have a M peak formation at its 2nd leg, and in that 2nd leg, we also have a M formation on the 15-min, a timeframe that I use to enter my trades.
CADCHF is then a pretty good short opportunity. I'll be short from 0.7815 and I'll have a SL around 0.7825. If the trade hits my SL, I'll get back in according to my strategy.
TP1: 2.1 RR
TP2: 3.5 RR
Extended target: 15.5 RR
Total Risk: 21+35+155/10+10+10 = 211/30 = 7.03 Real Risk/Reward
Aggregate Risk: 2.1+3.5+15.5 = 21.1 Reward if all TP Hit.
