BUBBLE 2024 continues ... PEAK IRRATIONAL EXUBERANCE

... and political theatrics.

Here are key developments that could provide more direction to ASIAN markets on Monday:
China 'data dump' (June)
China GDP (Q2)
India wholesale price inflation (June)

New yen short 158.360

Edited by dTraderB, 14 July 2024 - 06:28 PM.

Nq long 20584.25
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Just barely green today
Hedge 2 eaxh es & nq long
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Es long 5697.75
[quote name="dTraderB" post="914718" timestamp="1720812093"]
Nq long 20665
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Es long 5698
[quote name="dTraderB" post="914706" timestamp="1720807198"]
Nq long 20707

Edited by dTraderB, 14 July 2024 - 06:33 PM.

Near potential REVERSAL ZONE

https://www.mcoscill...t_breadth_data/

... and political theatrics.

I'd not be surprised at all if we see SPX 5700 during this monthly OpEx week ...................

Edited by redfoliage2, 15 July 2024 - 04:58 AM.

I'd not be surprised at all if we see SPX 5700 during this monthly OpEx week ...................

The market just kept going up while rotational games were played back and forth as each dip was bought.  This is unlikely to stop before Sept - Oct.  If the Fed don't cut by that time we may see a correction ...................

Edited by redfoliage2, 15 July 2024 - 05:17 AM.

"Trump hit steepens curve; China's economy judders
Key developments that should provide more direction to U.S. markets later on Friday:
New York Fed's June manufacturing survey
US corporate earnings: Goldman Sachs, BlackRock
Federal Reserve chair Jerome Powell speaks in Washington, San Francisco Fed President Mary Daly speaks; European Central Bank President Christine Lagarde speaks
Euro group of euro zone finance ministers meet in Brussels
U.S. Republican party convention starts
US Treasury auctions 3-, 6-month bills

"...already record high stocks tend to be called higher on the increased prospect of a Trump win too.



So first thing Monday - with betting markets now putting chances of a Trump election win close to 70% - U.S. stock futures were higher and the 2-to-30-year Treasury yield curve briefly turned positive for the first time since January.



The two-year-old yield curve inversion from two to 10 years, meantime, also squeezed to narrowest since January at just 23 basis points.



Fed chair Jerome Powell speaks in Washington later.



With short-term yields still falling in the slipstream of last week's surprising disinflation news, and futures now fully priced for a first Fed rate cut in September, but long-term yields edging higher regardless, the curve was clearly riffing off the Trump incident. "
REUTERS

FUNDSTRAT:
What To Look For After SPX > 5,600 and Cooling Inflation
Last week, the S&P 500 closed above the 5,600 level for the first time, reaching that psychologically important level even before June CPI numbers came in on Thursday. Headline inflation was negative for the first time since 2020. Core CPI rose just +0.06% MoM and 3.3% YoY, both showing inflation cooling from Mays data and both coming in below consensus expectations (0.2% and 3.4%, respectively).

Fundstrat Head of Research Tom Lee had much to say about that, but perhaps his reflexive response was the most telling: Whoa. The services ex-shelter component of CPI slowed to 4.92% (from 5.01% last month). Inflationistas have argued that wages will keep services inflation high, Lee said, but this number contradicts that, adding that wage growth is already visibly slowing, so I dont see services driving a second wave of inflation.

Federal Reserve Chair Jerome Powell also acknowledged the cooling labor market in testimony before the Senate Committee on Banking, Housing, and Urban Affairs and the House Financial Services Committee this week. The latest data show that labor market conditions have now cooled considerably from where they were two years ago, Powell told senators, asserting that the risk of elevated inflation had thus come into better balance with the risk that reducing policy restraint too late or too little could unduly weaken economic activity and employment.

Lee commented that overall, this is positive for equities, in our view, as this mitigates recession risk. In our view, inflation has been falling like a rock and the stubborn shelter and auto insurance have propped up CPI. But unfortunately, a data dependent Fed is also thus keeping interest rates unnecessarily high. So, the Fed Chair acknowledging two-sided risks is positive for stocks generally.

Head of Technical Strategy Mark Newton views the soft CPI numbers as catalytic, noting that the US Dollar and yields both turned down sharply after the latest consumer inflation numbers were released. Rather than a momentary trough, Newton suggested that further declines in both look likely in the weeks and months to come. Such a weakening in the dollar would be generally supportive of rallies in risk assets, he reminded us, and the same is arguably true for yields, as the correlation between stocks and Treasuries is still quite strong, in his view.