We’ve seen some bad economic data this week and the equities market decided this afternoon that bad news is good news. Both the non-manufacturing and the manufacturing PMI data continued their downward trajectory, adding to the belief that the only strength left is the consumer. On Friday, we’ll see if that sentiment remains true.
Ugh. You know things aren’t going well when the equities market celebrates bad news. The worse the market looks, the more likely we’ll see another Fed rate cut. I can’t believe we smile upon weakness, but the market loves Fed intervention more than strength in manufacturing and services. However, the Fed’s efforts may not be enough.
Consumer data on Friday will be primarily focused on the latest Unemployment Rate and Nonfarm Payrolls. They’ve been strong so far, but my gut tells me that we’ll finally start seeing weakness and the bounce we saw today will quickly roll over. The bears will have the last word headed into the weekend.
Technically speaking, SPY 200EMA held today. That’s the line in the sand tomorrow.
SPY Daily (red line EMA200)
Despite my assumption that we’ll end the week down, I did make some long-side trades today. I’ve set some fairly tight stops that may be taken out at the open, but I base my trades on the charts and not my gut :). I’m taking a small risk here, but I’m minimally exposed.
Trade activity (Robinhood):
- Sold ULTA for a good gain off the earnings bottom. I want back in soon.
- Added to existing TWLO position
- Started small positions in NVDA, NTRA
- Added to existing AMT position
