📈What the Stock Market told us This Week

The stock market is now more worried about recession than inflation. This was clear in the CPI and PPI data release and the reaction to this as well as the Fed minutes. CPI (YoY) was estimated to come in at 5.2% which is higher than the previous 6.0%. Instead we came in at 5%. This is a 100 basis point drop. Something that has not been seen since the pandemic. PPI (MoM) was estimated at 0.1% with a previous reading of -0.1%. The reading took out a low not seen since March of 2020 coming in at -.5%. This shows clearly that inflation is coming down and we are on the tail end of the rate hikes.

But did the Fed go too fast too soon? According to the Fed minutes” “Given their assessment of the potential economic effects of the recent banking-sector developments, the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years.” While they are talking about a looming recession they are considering raising rates again and perhaps more than once. This added massive volatility to the bond and stock market but also creates opportunity.

SPY weekly - New closing high of 2023 and the MACD is turning bullish

QQQ weekly - Continues to form a cup and having issue with resistance. MACD is bullish.

IWM weekly - Worst acting of the indexes with MACD bearish but still holding major support $170

XLF weekly - Financials stabilizing due to earnings of larger banks.

SOXX weekly - Continues to battle major resistance of $440 and MACD looks tired.

XLC Weekly - Constant higher highs and massive inflows. New 2023 and 9 month closing high.

Tomorrow we will cover the top 5 stocks to watch for earnings this week. In the meantime I explain in detail why there is a large implied put on the market. Pay close attention to what is said about current short positions and percentage of margin in relation to market cap. Video below.

Wishing Everyone Massive Success in 2023 🍾