Spoony Love said:

---

Gross...but I'm here for it.

---

Doesn't have to happen that way and along the same timing. Just an interesting fractal in time based on extremely similar circumstances (FED FUNDS paused for a year after a significant hiking cycle while market moves up despite inflation concerns)

FYI Bank earnings start tomorrow as well

EnronAg said:

---

markets gave back everything from those cool CPI numbers...personally, I think fake, but that's beside the point...how are we not just ripping on that??? early morning shakeout before rocket launch???

---

Because the market has ripped this year. Yesterday was up 1%, a healthy pullback on expected news is normal.

Bond yields falling is the big story today.

Gordo14 said:

---

EnronAg said:

---

markets gave back everything from those cool CPI numbers...personally, I think fake, but that's beside the point...how are we not just ripping on that??? early morning shakeout before rocket launch???

---

Because the market has ripped this year. Yesterday was up 1%, a healthy pullback on expected news is normal.

Bond yields falling is the big story today.

---

Do you believe in the efficient market hypothesis?

Gordo14 said:

---

EnronAg said:

---

markets gave back everything from those cool CPI numbers...personally, I think fake, but that's beside the point...how are we not just ripping on that??? early morning shakeout before rocket launch???

---

Because the market has ripped this year. Yesterday was up 1%, a healthy pullback on expected news is normal.

Bond yields falling is the big story today.

---

and I would argue that those numbers (while completely fabricated, ion my opinion) would not be expected news as the whispers across the board were 0.1-0.2% hotter than the actuals today...all trending again lower and negative month over month...again, I think the numbers are GIGO, but that is (I guess) what is to be believed by the market...

Well I just lost all my gains from yesterday

FishrCoAg said:

---

Heineken-Ashi said:

---

I bleed maroon said:

---

I guess we just have a difference of perspective. I never really figured you as a monetary policy driven guy, but maybe you are. I see whatever Powell does as much less important to our future than fixing our fiscal irresponsibility (Trump/Biden/Bush/Obama, yep, all of them). Decisive action on fiscal restraint can make monetary policy much less important, but some see the Fed as the be-all/end-all, which it was never intended to be. It happens to be more politically palatable (by all parties) than the much less popular belt-tightening that's needed.

---

I'm not a monetary policy guy. But we live in a monetary policy world and I have to make decisions in my personal and professional life that monetary policy can affect.

Regarding Powell in the FED, there's nothing they can do except take measure to kick the can further. Every time we kick the can, we steal more productivity from the future economy to merely stabilize the current economy. We steal wealth from our own futures and our kids futures to maintain the status quo of the present. Nobody wants a recession or depression. People will lose jobs, homes, wealth, and some will die. But this is the reality of what you get when you start down the path of devaluing the currency to smooth out natural economic cycles. You essentially create a "buy the dip" moment at the present while kick down the road what would have been a natural cycle down, but will now be longer and deeper when it comes. And we've done this continually since 2008. Before that, the FED could take a little action here or there with small movements in rates and adding or subtracting assets on their balance sheer. The economic backdrop was in a long term period of growth and debt was manageable. In 2008, they "saved" the economy by changing the rules of the game. Instead of adding assets to their balance sheet from the treasury sale of new securities to expand the money supply, they borrowed the money from the banks and then loaned it back to the banks 100fold. This was when the economy and middle class went into a hole that it couldn't recover from. Because that money would never be paid back. Then they did it again in 2020 at a 4x factor. The FED from the 1970's and 1980's that used strict interest rate management to defeat inflation and get the country back on track turned into a FED that took money from the people, leveraged it, AND used interest rate management to merely prop up a structure that needed to be reset. There are no tools left. The balance sheet is mostly full. If they buy treasuries and add them to the balance sheet, the interest on the debt will explode, and it's already 1.1T. If they stimulate in any way its going to cause runaway hyperinflation. And if they use strict interest rate management to put a high top over inflation, they will cause the massive recession they are being celebrated as avoiding. There are no tools. They are sitting ducks just waiting, all in the hopes they aren't the ones blamed.

---

I am not economically smart or educated enough to know how this plays out, and your scenario certainly sounds plausible. My big question is how long can they keep the balls in the air? Months, years, decades?

---

what do you think happens with a $34 Trillion debt, social security running out of money in 2032, and medicare already paying out more than it takes in (before covering a population getting older and obesity GLP-1s forever)

the USA is literally adding a TRILLION dollars in debt every six months, to where the interest payments alone are more than the defense budget.

I hope yall booked TSLA profits when it was above $260

El_duderino said:

---

I hope yall booked TSLA profits when it was above $260

---

What's up with that, people just booking profits? its down almost 15%

Robotaxi unveiling delayed from August to October.

so great, thanks for posting Prog!

deddog said:

---

El_duderino said:

---

I hope yall booked TSLA profits when it was above $260

---

What's up with that, people just booking profits? its down almost 15%

---

This was a significant resistance area. If it can hold $225, $300 is still on the table and a MAJOR MAJOR resistance area. I would likely sell out there and look to buy back between $175 and $200 after the ensuing selloff. Selloff to back under $200 would be a mix of older capital exiting at breakeven or even a slight gain after feeling in the dumps since December, and new money at a low basis profit taking to lower basis. After finding support under $200, next target would be $375-$450 between 2025 and 2026 sometime.

What in the world has gotten in to IWM today? Rotation to small caps?

Rate cut odds increase, so small caps benefit. Add in that it had heavy bearish positioning and was close to breaking out of a wedge. Now it got squeezed today with the news being positive for small caps.

MAGS ETF ("magnificent seven") down 4.1%

Great day to rotate TNA profits into the rest of the market.

Also grabbed the low on BRKB.

gougler08 said:

---

What in the world has gotten in to IWM today? Rotation to small caps?

---

That's the consensus.

I've gone back 25 years, and the only time I can find where SPX is down 1% while RUT is up significantly was March of 2002, and this was the last bounce of a long downtrend for both. SPX just sold into the last fall and IWM joined a week or two later.

RUT/IWM almost always falls before or within 1 day of the SPX starting a move down. There is no such thing as "rotation" into the Russell 2000 looking back in history. Go check. You won't find it. If it's happening, it's happening for the very first time.

What history does show is that when the SPX sells off, Russell always joins. So in my opinion, this either isn't the start of a correction, or it is, and this is a trash fakeout rally in Russell.

Heineken-Ashi said:

---

gougler08 said:

---

What in the world has gotten in to IWM today? Rotation to small caps?

---

That's the consensus.

I've gone back 25 years, and the only time I can find where SPX is down 1% while RUT is up significantly was March of 2022.

RUT/IWM almost always falls before or within 1 day of the SPX starting a move down. There is no such thing as "rotation" into the Russell 2000 looking back in history. Go check. You won't find it. If it's happening, it's happening for the very first time.

What history does show is that when the SPX sells off, Russell always joins. So in my opinion, this either isn't the start of a correction, or it is, and this is a trash fakeout rally in Russell.

---

Thanks for the info as always

Go look at individual charts in the Russell 2000. Most of these bounces are huge % gains, but in the grand scheme look very small and very corrective after finding support in long deep downtrends. These are not good companies being rotated into. These are the bottom feeders, usually with significant debt, that are seeing dead cat bounces within larger downtrends. I'd be very careful.

If you do jump in, keep a tight stop. It could theoretically run for a couple days. And it can selloff even harder than it gains.

No idea on the rotation to small caps discussion, but this is pretty much how it usually goes when CPI comes in cool.

The one I find more interesting is Berkshire. I haven't studied it too closely but so far this year, it seems to usually do the opposite of what the rest of the market does. Often finishes red or sideways on huge green days, and now a green day while everything else is deep red.

Here's SPX



I want you to truly ask yourself if the broader market participants are rotating out of NVDA, MSFT, GOOG, AAPL, AMZN, META, LLY, AVGO, AMD, ADBE, WMT, NFLX, QCOM, TXN, MU, and COST and into..

The smallest companies in the index?

Or is this likely some profit taking after huge gains from the big boys while the little boys enjoy short term relief from their downtrends at support levels?

Brian Earl Spilner said:

---

No idea on the rotation to small caps discussion, but this is pretty much how it usually goes when CPI comes in cool.

The one I find more interesting is Berkshire. I haven't studied it too closely but so far this year, it seems to usually do the opposite of what the rest of the market does. Often finishes red or sideways on huge green days, and now a green day while everything else is deep red.

---

It is heavy on blue chips, light on tech.

Lower interest rates will help it be green.

NVDA Woof

I have no strong opinion one way or the other, but what exactly is that distinction in your mind?

Folks taking profits on the megacaps, and buying into smaller companies, how is that different?

I don't think anyone thinks all of that capital is going into smallcaps, but some of it maybe.

rolo said:

---

NVDA Woof

---

I picked the perfect day yesterday to sell 60% of my position. I just was a little early today buying into MSFT with that money.

Brian Earl Spilner said:

---

I have no strong opinion one way or the other, but what exactly is that distinction in your mind?

Folks taking profits on the megacaps, and buying into smaller companies, how is that different?

I don't think anyone thinks all of that capital is going into smallcaps, but some of it maybe.

---

Hard to know honestly. But your thesis would have to be that institutional buyers are leaving the MAG 7 and going to the weakest companies from the last two years.

In 2000, when smart money left big tech, everything fell. In 2021, when smart money left big tech, everything fell.

Last time inflation was high and coming down (same timeframe in 2007), when smart money left blue chips, it left everything.

Like I said, it's hard to buy into something that has no history of happening, at least in the last 25 years. If money is truly rotating, then you should see a huge drop in Mag 7 and IWM blast back to 2021 levels.. within a couple weeks. I don't buy that people are leaving the companies that are apparently going to carry us into this AI fueled future.. for companies that are losing money, simply because inflation was down a fraction of a hair month over month and the FED might drop 25 basis points. That kind of rotation would be saying that big tech and blue chips are done and the rest of the stock market that has lost money hand over fist is going to carry us forward. How in the world does that make sense?

Either they all fall, or Mag 7 continues to outperform.

Can someone give me their thoughts on Nike? It is a great company that is down 20% from it's earnings and I know guidance was not the best... With the Olympics looming, I would think this would be a great stock to buy at these levels.

HoustonAg2014 said:

---

Can someone give me their thoughts on Nike? It is a great company that is down 20% from it's earnings and I know guidance was not the best... With the Olympics looming, I would think this would be a great stock to buy at these levels.

---

I'm expecting a bounce soon. And possibly a good sized one, before selling takes back over to new lows. Usually I would sell puts in a time like this 2-3 months out. But going out to October, there's no premium in them showing that the fear of significant lows over the next 2-3 months is largely gone.

It's below the weekly 610 EMA but showing a weekly RSI buy signal. Hourly EMA's are signaling it might be in the beginning phase of reversal, but daily has a TON of work to do to confirm the same and price would likely be $90+ by the time daily confirmed a buy.

Problem is, there's no logical stop level. Recent low was literally yesterday. Next relevant support is high $50's. Retail sales are slowing. It's hard to jump in here without a confident stop, but I've been considering it for a couple days.

Edit to add: Weekly MACD broke its positive divergence setup. Doesn't mean it can't form a new one, but you'd be guessing by buying here.

Seems that this has happened in the past. They always seem to come back though.