SPX - There's a likely reversal of trend. Could last a couple candles, could last a while. If we get a continuation of trend with no lower wicks that breaks the yellow trend line, game on.

https://i.imgur.com/BgruXcu.jpg

When viewing the market through beer candles, you have to understand that each candle opens at the halfway point of the previous candle and represents the average of the current time period's action.

Open = 1/2(open of previous bar + close of previous bar)
Close = 1/4(Open + High + Low + Close)
High = Max of high, open, and close.
Low = Min of low, open, and close.

A strong trend up will be green or unfilled and have no lower wicks. Opposite for strong downward trend. A candle with a wick on both sides is around a 75% signal that a reversal of trend is either imminent or soon to be.

Previous days like Friday (reversal candle without a preceding double wick candle and looking like a strong upward trend green candle) have usually involved another 2-4 days of continuation of trend during this years chart.

So the beer candles have spoken and point to at hopefully, at least half a week of continuation upward. If any day ends with a red candle, a bottom wick, or a double wick, your best to exit your short to mid term longs and wait for confirmation of new trend or resumption of current trend.

This has been your daily dose of uncompromising, premium, pure tasting SPX outlook.

https://www.aspris.co.uk/wp-content/uploads/2017/07/Heineken-330ml-scaled.jpg

Risk On As Fed Fears of 100 Continue to Dissipate... Oil Rises on Saudi Meeting

Equities have started the week where they left off the end of last week... Overnight US equity futures in S+P terms are up 40 points or a little over 1%... This is consistent over what we see globally with European equities up about 1.5% and Hang Sang up 2.7%... It is being led by Tech... The catalyst was the decrease in fears of a 100 basis point rate rise next week...9.1% CPI started the fear, it was added to by 11.3% PPI... But it was cut down by uber Hawk Governor Waller who drew the line in the sand that 1% was too much at this point... It was backed up by Michigan sentiment that showed a slowing of 5-10 year inflation expectations , which went from 3.3 to 3.1 to 2.8... And the final nail in the coffin was the Timaros piece in the WSJ Sunday which basically said that 75 was the number... We have seen the Fed use Timaros before to let the world know where they stand when the Fed reached the black out period, which is what they are in now ... We do not see economic numbers between now and the Fed meeting that would alter the 75 view... But you never know...

Fed increases look to decrease over the next 6 months... 75 in July, 50-75 for September, which could be lowered...as for November 25 and maybe that could be it, or another 25 in December... Increase rate decreases are starting to be built in for the end of the first quarter for 2023... But a lot of wood has to be chopped by then...

Inflation... Has it peaked... We think so...even though the Saudi Meeting was a failure in the short term, the US economy is slowing down...that is true throughout the world, with China's economy being abysmal... Prices paid index in Friday's Empire Manufacturing fell to 64.3 from 78.6 while prices received dropped from 31.3 from 43.6... And gas has dropped even though oil is up a couple of bucks this morning...

Oil... Up a couple of bucks this morning but the bigger fear is that Russia will not start its pipeline on Thursday which has been shut down for maintenance... Many think that Russia will use it as leverage to push Europe to back off from interfering in Ukraine, whose situation continues to deteriorate... We think the markets may have a problem at the end of the week as we read an ITC report this morning quoting Russian Media that said the restart of the Russian pipeline may not start up again until early August...Specifically, the part needed is expected to arrive on July 24th and it will take 3-4 days for commissioning and that the gas compressor should be ready to pump gas in early August... Again we only say this because the stories we have been reading say that they expect the gas to reopen this Thursday, the same day of the first ECB increase in years...

Rates... European rates got hit hard early this morning but are grinding back... Italy got particularly hit hard as Draghi is trying to exit the PM role... But since we started writing this morning we see the Italian 10 year rally 8 basis, and the sting of higher rates in Europe has brought it buyers... As for US Treasuries, we see a mild bear steepening this morning..2/10 are still inverted but by less... And rates as a whole are lower in price, higher in yield by about 3-4 basis points... Our view for 10 years is 2.90-3% for today.. Technically we have 2.875-3.02... And the recent spike to 2.74 should keep us at bay... FAMOUS LAST WORDS... THIS SHOULD BE A QUIET WEEK IN BONDS.. Little economic news of substance and no Fed speak... Washington is quiet with very little getting done...

Credit... Should be a better week... 20-25 billion is expected led by bank issuance... Citi, JPM and maybe Stanley... GS earnings were good and the stock is up 12 points... GS Fixed income trading was better by 55%, kudos to those that took advantage of the volatility... Great to have orders... As for Credit in general we think it will be steady through next week... We watched BB credit on Friday afternoon, and all three panelists liked Corporate credit spreads and would be buyers... Only one actually ran a portfolio... But it is consistent with what Reider of Black rock has been saying...GS and MS pointed out that record issuance over the last two years has given corporate treasurers breathing room... So with higher rates and wider spreads they do not have to issue as much debt. And have termed out their needs over the next few years... Citi sees a drop of 10.5% in issuance to 1.2 trillion for 2022...

ECB and Bank of Japan on Thursday... We do expect 25 from the ECB and the potential of another 50 in September... But that assumes a lot... We think it is still crazy to have negative rates in the ECB with inflation approaching double digits... And then again we thought it was ridiculous for our Fed to continue to ease last year under the banner of transitory, which never existed... But we grew up as a bond trader, so we see things more clearly through the largest markets in the world... Again this SHOULD BE A RANGE BOUND WEEK...

tailgatetimer10 said:

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Anyone following this?

https://www.reuters.com/technology/us-chip-industry-split-over-chips-act-benefits-intel-sources-2022-07-18/

I really wonder who in Congress is in bed with Intel

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That's why NVDA is up so strong PM. Mr. Pelosi bought 20,000 shares last week.

tailgatetimer10 said:

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Most of this funding is set aside for freaking Intel

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Something positive is coming for NVDA, Pelosi doesn't lose.

I am sure. Just annoys me to watch intel issue a stock buy back. Then get more fed funding after they dropped the ball on leading tech transition.

tailgatetimer10 said:

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I am sure. Just annoys me to watch intel issue a stock buy back. Then get more fed funding after they dropped the ball on leading tech transition.

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yep, while this administration ****s all over Oil and Gas.

...I just wanna beat on the (oil) drum all day...

Ranger222 said:

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LMCane said:

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Homebuilder sentiment plunges in July as buyers pull back
PUBLISHED MON, JUL 18 202210:00 AM EDTUPDATED AN HOUR AGO


KEY POINTS

• Builder sentiment dropped 12 points to 55, according to a monthly survey from the National Association of Home Builders.
• That marks the largest single-month drop in the survey's 37-year history with the exception of April 2020.
• Sentiment about current sales conditions saw the largest drop, while buyer traffic fell firmly into negative territory.

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A little surprised HD and LOW are not weaker following this. I was always led to believe they follow HB sentiment along with the idea people generally renovate homes more frequently/spend in better home buying markets

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IVe got no data to back this up but maybe people are thinking that they wont be jumping to a new house so might as well do those home upgrades themselves to make the current house more livable?

BrokeAssAggie said:

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added a couple SPY $387 Put lotto's. 0.75 entry

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Sold all but 1 contract at $1.35.