Economic Data vs. Technical Analysis
In October, the final PMI value of Markit manufacturing in the United States was 50.4, expected to be 49.9, and the previous value was 49.9.
PMI data came out higher than expected. It immediately caused a sell-off on the $SPDR S&P 500 ETF (SPY.US)$. This economic data is showing that inflation is not slowing like the Fed would like. Also the market was expecting a lower number as several regional PMI numbers have come in lower. So this was a big surprise. Now investors must assume there will be no slowdown in interest rate hikes which is bearish for equities. We will find out tomorrow.
PMI data came out higher than expected. It immediately caused a sell-off on the $SPDR S&P 500 ETF (SPY.US)$. This economic data is showing that inflation is not slowing like the Fed would like. Also the market was expecting a lower number as several regional PMI numbers have come in lower. So this was a big surprise. Now investors must assume there will be no slowdown in interest rate hikes which is bearish for equities. We will find out tomorrow.
30 Minutes later the ISM PMI data was released with the same effect. Both releases of economic data came in higher than expectations. There were other less significant data releases on this same day that also showed that the economy is not slowing down enough for the Fed to pause interest rate hikes.
You can see how the treasury bond market reacted to the economic data. Investors are expecting higher interest rates after the data release. This sent the yields closer to complete inversion like they were earlier this year. Participants are selling short term treasury bonds wich lifts treasury yields. They are doing this because they want to sell their lower yielding bonds in expectation that the fed to hike rates aggressively which will further increase bond yields so they can buy back at a higher yield in the future after the fed raises interest rates.
If you follow my posts then you know I am a fiend for technical analysis. Just look at how this very negative reaction from poor PMI data coincides perfectly with the long-term bear market resistance that has held the $dia within the current bear market. If you were trading off of the technical levels then you would have been ready and waiting for this to happen. Also if you were waiting for some negative economic data then you would have been ready as well. It is also a convenient coincidence that the Federal Reserve interest rate decision will coincide with this resistance level as well. I always preach that the major market moving events typically coincide with the major technical support/resistance levels. I don't know why. Maybe it has something to do with the repetitive fibonacci mathematics of the algorithmic trading machines. Or possibly it is a carefully monitored and manipulated market. Who knows for sure?
You can follow the news and economic data and trade off of that based on how the market reacts to news. Or you could trade off of technical analysis and see how the market reacts at the major technical levels. Or you could combine the two and make much more educated and profitable trades.
You can follow the news and economic data and trade off of that based on how the market reacts to news. Or you could trade off of technical analysis and see how the market reacts at the major technical levels. Or you could combine the two and make much more educated and profitable trades.
And remember that tomorrow is more than likely the most important day of this quarter and possibly farther out into next year. Tomorrow the Fed will decide interest rates. And more importantly they will provide some insight on future rate hikes and the future economic outlook.
ALL EYES ON THE FEDERAL RESERVE MEETING TOMORROW!
$SPDR Dow Jones Industrial Average Trust (DIA.US)$ $Invesco QQQ Trust (QQQ.US)$ $SPDR S&P 500 ETF (SPY.US)$ $iShares Russell 2000 ETF (IWM.US)$ $VIX Index Futures(DEC4) (VXmain.US)$ $Gold Futures(DEC4) (GCmain.US)$ $Powershares Exchange Traded Fd Tst Db Us Dollar Index Bullish Fund Etf (UUP.US)$ $SPDR Gold ETF (GLD.US)$ $iShares Silver Trust (SLV.US)$ $Ishares Iboxx $ High Yield Corporate Bond Etf (HYG.US)$ $Ishares Iboxx $ Investment Grade Corporate Bond Etf (LQD.US)$ $iShares 20+ Year Treasury Bond ETF (TLT.US)$ $Crude Oil Futures(JAN5) (CLmain.US)$
$TENCENT (00700.HK)$ $SSE Composite Index (000001.SH)$ $CSI 300 Index (000300.SH)$ $CSI 300 Index (000300.SH)$ $FTSE Singapore Straits Time Index (.STI.SG)$ $NIO-SW (09866.HK)$ $NIO Inc. USD OV (NIO.SG)$ $NIO Inc (NIO.US)$ $BILIBILI-W (09626.HK)$ $Bilibili (BILI.US)$ $Baidu (BIDU.US)$ $BIDU-SW (09888.HK)$ $XPeng (XPEV.US)$ $Li Auto (LI.US)$ $BYD COMPANY (01211.HK)$ $BYD Company Limited (002594.SZ)$ $S&P/ASX 200 (.XJO.AU)$ $FTSE Singapore Straits Time Index (.STI.SG)$
$TENCENT (00700.HK)$ $SSE Composite Index (000001.SH)$ $CSI 300 Index (000300.SH)$ $CSI 300 Index (000300.SH)$ $FTSE Singapore Straits Time Index (.STI.SG)$ $NIO-SW (09866.HK)$ $NIO Inc. USD OV (NIO.SG)$ $NIO Inc (NIO.US)$ $BILIBILI-W (09626.HK)$ $Bilibili (BILI.US)$ $Baidu (BIDU.US)$ $BIDU-SW (09888.HK)$ $XPeng (XPEV.US)$ $Li Auto (LI.US)$ $BYD COMPANY (01211.HK)$ $BYD Company Limited (002594.SZ)$ $S&P/ASX 200 (.XJO.AU)$ $FTSE Singapore Straits Time Index (.STI.SG)$
$Apple (AAPL.US)$ $Tesla (TSLA.US)$ $Microsoft (MSFT.US)$ $Amazon (AMZN.US)$ $NVIDIA (NVDA.US)$ $Meta Platforms (META.US)$ $Alphabet-C (GOOG.US)$
$Chevron (CVX.US)$ $Phillips 66 (PSX.US)$ $Valero Energy (VLO.US)$ $Devon Energy (DVN.US)$ $Occidental Petroleum (OXY.US)$ $W&T Offshore (WTI.US)$ $United States Oil Fund LP (USO.US)$ $United Sts Brent Oil Fd Lp Unit (BNO.US)$ $Imperial Petroleum (IMPP.US)$ $Houston American Energy (HUSA.US)$ $Indonesia Energy (INDO.US)$ $BP PLC (BP.US)$ $Exxon Mobil (XOM.US)$
$Mullen Automotive (MULN.US)$ $Arcimoto (FUV.US)$ $Nikola (NKLA.US)$ $Fisker (FSR.US)$ $Rivian Automotive (RIVN.US)$ $Lordstown Motors (RIDE.US)$ $Full Truck Alliance (YMM.US)$ $Ford Motor (F.US)$ $General Motors (GM.US)$
$Chevron (CVX.US)$ $Phillips 66 (PSX.US)$ $Valero Energy (VLO.US)$ $Devon Energy (DVN.US)$ $Occidental Petroleum (OXY.US)$ $W&T Offshore (WTI.US)$ $United States Oil Fund LP (USO.US)$ $United Sts Brent Oil Fd Lp Unit (BNO.US)$ $Imperial Petroleum (IMPP.US)$ $Houston American Energy (HUSA.US)$ $Indonesia Energy (INDO.US)$ $BP PLC (BP.US)$ $Exxon Mobil (XOM.US)$
$Mullen Automotive (MULN.US)$ $Arcimoto (FUV.US)$ $Nikola (NKLA.US)$ $Fisker (FSR.US)$ $Rivian Automotive (RIVN.US)$ $Lordstown Motors (RIDE.US)$ $Full Truck Alliance (YMM.US)$ $Ford Motor (F.US)$ $General Motors (GM.US)$
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Ben 23 : Good news is bad for stocks now. Or maybe the market makers are using this as an excuse for sell the rip.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
dwarrior : Just ride the wave
TRIUMPHANT RETURNS : no reason for FED PIVOT , strong economy can take pain like what papa J said.
70617193 : Take off
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SpyderCall OP dwarrior : agreed easy money on puts today. tomorrow might be a fun ride as well
SpyderCall OP TRIUMPHANT RETURNS : right
SpyderCall OP 70617193 : do you think it will bounce here? some investor just bought over 252,000 shares of the SPY like 20 minutes ago
SpyderCall OP Ben 23 : correct. good news is bad news right now. Im wondering how the market will act when the really bad economic data comes in and the Fed starts slowing rate hikes. Im assuming if the economic data does not come in very very terrible then the market might rise because the fed is slowing rate hikes. But if the economic data comes in too terrible then the market will sell off no matter if the fed pauses or slows rate hikes. At that point it will require a fed reversal. or even a fiscal or stimulus
SpyderCall OP 70617193 : its bouncing so far
Rahula14 : Run and take profits while you can before FOMC announcement
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