Daily Market News - 14th July 2022
Sailing Into The JPM Storm
In case you missed it.
Jamie Dimon over at JP Morgan just laid out another doomsday scenario for the economy over the coming months with the highly anticipated JPM earnings announcement.
We already know the cost of things is going up. Inflation continues to rip through the roof with another huge 9.1% print yesterday, which probably brings in the likelihood of another huge rate hike at the next Fed meeting. (I’m personally expecting another 75bps increase)
I have my ex wife calling from Canada asking what’s going to happen to the Canadian Property Market and if she should be worried about all her property after the mammoth 1% interest rate increase announced yesterday.
I have friends asking if they should now buy the dip.
The crypto bros are walking around like the Walking Dead.
These typically aren’t things we see in healthy markets. I do know that much.
But let’s take a look at Financials since they’ve kicked off earnings season.
SPRD Financials ETF (XLF)
Going into earnings, this chart is quite important to my work. If we lose the Financials and they break lower by month end, that might be an environment where further defensive action becomes sensible.
Generally, my own personal bias is to look for buy opportunities for tactical rebound trades within the overall context of a bear market (range bound charts are appealing to me at the moment as they offer clear risk management levels - I call it a process thing)
So rather than have a meltdown at Jamie Dimon’s scare mongering (FYI - I don’t trust ANY of the Investment Banks), I’m looking at it through the lens of what if these charts hold up…
Lets look at Commodities
Invesco Commodity Tracking ETF (DBC)
I’ve been recommending to our clients / members to go short on Commodities for a while now, the failed break out was the catalyst for a short position and the message has been, it’s in a down trend, and with down trends you can generally continue to go short on rallies.
Some commodities are holding up, but when we see areas like Crude Oil and XLE tank 30% in a matter of weeks, that probably tells its own story at this point.
Crude Oil Chart
The above chart shows that Oil put in a logical top back in March.
The question I have now, is it ready to break lower? I’m certainly open to it and how does that affect things like commodity ETF’s?
Finally, lets look at good ole Gold. It’s done nothing for a very long time.
Is it a commodity or is it a currency? I don’t even know at this point.
Well, the chart is range bound, I shared this last night in our premium work in the Members Midweek Half Time. There may be some opportunities in the space if this chart holds up.
I’m thinking maybe Gold Miners.
SPRD Gold ETF
Key Takeaways
The market’s a mess, looking for tactical long AND short positions both make sense, charts will help with this.
There’s something I’d ask you to consider though.
The stock market is likely to bottom before the economy.
“Capitulation” is a word you’ll see banded about a lot by all the mainstream financial media dinosaurs, for me, we haven’t really seen that yet despite how bad it’s got
If things like the Small Caps ($162 Level) and the Dow ($295 Level) break key levels, we’ll be close to it but until then, being flexible and open to all possibilities make sense.
I laid out 10 Charts at the weekend in case you missed it.
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