The Fed Created the Largest Pot of Boiling Water in History

18Sep1:12 pmEST

Here's Why I'm Short the XLF

Using one of the levered bear ETFs to go long, on Friday I alerted Members that I effectively went short the XLF (ETF for the financial sector's larger players, as the KRE houses the regional banks). So why not just short the regional banks instead? Sure, they do seem to be in trouble. However, in terms of risk to reward ratio, we have some...

17Sep10:41 amEST

Weekend Overview and Analysis 09/17/23 {Video}

The following video is a brief, condensed version of the full-length Weekend Video Strategy Session which I present each weekend to members of Market Chess Subscription Services. In the longer version, I offer tons of actionable trade ideas, educational content, and in-depth objective analysis across all markets. Please click here for more...

15Sep11:43 amEST

A Market Reflects Its Fed

Just as a sports team eventually reflects its coach, and even a military unit reflects its squad leader, so too does a market eventually reflect its Fed's policies. Years of laughing in the face of headwinds, poor technical action, and even outright alarming news in the market reflects an arrogant Federal Reserve who wants nothing more than to...

14Sep10:49 amEST

Europe Needs a New Marshall Plan

With the ECB raising rates again this morning and also lowering growth forecasts, the Euro is selling off against the Dollar. On the Euro/Dollar monthly chart, below, I see no evidence of a long-term bottom in the face of a strong multi-year downtrend. In fact, risk looks much lower here into 2024, as the European Union in general could...

13Sep10:33 amEST

Know When You're Being Manipulated

You may have noticed the language coming out of people like Nick Timiraos (of the WSJ and widely seen as The Fed's mouthpiece) immediately after the hotter-than-expected CPI print this morning. Specifically, the great lengths he went to downplay the uptick in inflation. He noted how it was merely "a touch" above expectations, as though he were...

12Sep10:57 amEST

Let's Find the Real Apex Predator

As we head into what are highly likely to be the pivotal events for the rest of 2023, namely the CPI tomorrow, then the FOMC next week, it is worth noting that both the High Yield Corporate Bond and Junk Bond ETFs, respectively below on their weekly timeframes, are at their apexes after roughly sixteen month consolidations each. From periods of...

11Sep11:35 amEST

Opening Game Moves

The overall price action early on smacks of a kind of opening game you would expect in a championship chess match, with both sides trying to jockey for just the right position headed into the CPI this Wednesday, followed by the FOMC the week after. Specifically, NVDA and semiconductors are selling off, while TSLA is surging higher to the tune...

10Sep11:34 amEST

Weekend Overview and Analysis 09/10/23 {Video}

The following video is a brief, condensed version of the full-length Weekend Video Strategy Session which I present each weekend to members of Market Chess Subscription Services. In the longer version, I offer tons of actionable trade ideas, educational content, and in-depth objective analysis across all markets. Please click here for more...

08Sep11:09 amEST

Both Statements Can Be True

On the one hand, the eighteen month "lag effect" from Powell's first rate hike (in March 2022) can finally kick in, and probably is as we speak according to various data, leading to tighter financial conditions for tapped out consumers and a long-in-the-tooth jobs market starting to crack. On the other hand, the near-term pain trade in both...

07Sep11:30 amEST

The Fed Created the Largest Pot of Boiling Water in History

Ah, what could have been, Jay Powell. You could have ripped the bandaid off of this whole mess back in 2021, even 2022, by ramping up QT and dumping The Fed's toxic (about $2.6 trillion worth) mortgage-backed securities onto the market, coupled with inter-meeting surprise rate hikes, and tougher talk about inflation than the lawyer (and I am a...