NVDA
NVIDIA
-- 109.670 TSLA
Tesla
-- 263.550 CRWV
CoreWeave
-- 40.000 LULU
Lululemon Athletica
-- 293.060 PLTR
Palantir
-- 85.850 
Bearish Type of Morning
Rough Start to the Day
A lots of negative sentiment popped up overnight. From negative geopolitical news, sour earnings reactions, trade sanction rumors, and contractionary economic data in one of the world's biggest economies. Equity markets are taking another hit this morning. Safe havens are ripping. And even though the major indices are deep in the red, defensive stocks are performing much better than the broader market. Is today's slew of negative headlines anything to worry about? Will we finally get that correction?
Geopolitical Turmoil Spurring Safe Haven Demand
News about an impending Iranian attack is sending safe haven assets flying overnight. Gold, treasuries, and the dollar are all rallying off of the news. The dollar and gold climbing together is not something you see often as the value of the dollar and gold have an inverse relationship.
The positive correlating price action of the two assets leads me to believe that the safe haven trade is very strong today as the dollar and gold can be strong safe haven assets. But we should expect the inverse correlation to return in some degree in the near future.
The move up in treasuries could possibly be just a mechanical move. After such a huge sell off in Treasury bonds over the past couple of days, this could be a small technical bounce. Strong demand in treasuries will add to the demand in US dollars because you must buy a country's treasuries in their own currency. This aspect, as well as the safe haven bid, will only add to the dollar's upward pressure.
Energy Prices Spiking Again, This is Very Bad for Inflation
Tensions in the Middle East typically lead to higher oil or energy prices. This will only add more steam to the energy rally. And you can see this in the big spike up in energy prices today. The contractionary data out of China is not even putting a dent in this energy spike. As we all know, rising energy prices puts upward pressure on inflation. This would be bad for the supposed rate cuts that are going to happen.
Many Fed officials have strayed away from the idea of cutting very soon. But until they announce hiking, tapering, or any type of quantative tightening, then the current level of liquidity in the markets is still available. So, economic growth and corporate earnings can still add upward leverage to equity markets even though we might not get the rate cut type of QE that we would love to see as equity investors.
More Consolidation in the Semi Space
Aside from the fact that a rising dollar puts negative pressure on equities, the semiconductor sector is facing pressure over rumors of further trade restrictions between China and the U.S. Much of the semiconductor sector is already experiencing somewhat of a correction. Will this correction bleed out into the broader market?
Starting Earnings Season Off On the Wrong Foot
Earning season officially kicked off today with big banks starting the round of reporting as usual. It started off on a rough note as investors reaction to several banks earnings, especially $JPMorgan (JPM.US)$ , were very negative.
Contractionary Data in the Worlds Second Biggest Economy
Bearish trade data out of China is putting pressure on Chinese equities once again. The decreasing money supply is a sign of less liquidity for equity markets. This is putting pressure on the NASDAQ through its Chinese ADR constituents. Recently, Chinese economic data showed signs of expansion. Was today's reading a fluke? Or will the Chinese economy fall back into contraction?
Should We Buy This Dip?
Is this some elaborate media scheme to incite the bears to come out of hibernation? The markets reaction seems to point in that direction. Just look at the VIX. Not to mention, any headlines that are quite bearish during overextended markets will always wake up at least a few bears. Personally, I am in the correction camp as I believe the market is overdue for at least a small correction before continuing to make new all-time highs.
So, do you think this negative sentiment today is anything to worry about?
Good Luck Trading
As always, I am not a financial professional, and this is not investment advice. Be careful and be patient. Dont anticipate the market. Rather, participate in the market. Don't invest money that you can't afford to lose. Give some of your investments time and know when to cut your losses.
Don't be greedy. Don't invest in anything you don't understand. Don't put all of your eggs in one basket. Don't listen to the hype. Don't fomo or panic into or out of trades. Do your own due diligence. And just follow the trends. A trend is your friend. Good luck trading.
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$FTSE Bursa Malaysia KLCI Index (.KLSE.MY)$ $FTSE Straits All-Share Index (.FSTAS.SG)$ $FTSE Straits Mid-Cap Index (.FSTM.SG)$ $S&P/ASX 200 (.XJO.AU)$ $S&P/ASX 100 (.XTO.AU)$ $Hang Seng Index (800000.HK)$ $Hang Seng TECH Index (800700.HK)$ $SSE Composite Index (000001.SH)$ $CSI 300 Index (000300.SH)$
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MindOverMatter : Dame that's a lot of buy the dip votes
SpyderCall OP MindOverMatter : I see that. Has me worried.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
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Mike Obama : cash is king
SpyderCall OP Mike Obama : It looks like that old proverb, "Cash is trash," is not valid during a global inflationary environment.
SpyderCall OP MindOverMatter : It could be because I tagged AMC. Those guys love buying dips.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
StrykerAce SpyderCall OP : Cash may be falling in value fast, but AMC be like “hold my beer”
Foodie Investor SpyderCall OP : Isn’t buying the dip better than grabbing puts as it will drive price back up?
SpyderCall OP Foodie Investor : Right. But the puts only push the price back up once you sell them. When investors are buying puts, that is shorting the market. That puts downward pressure on markets. Once traders sell the puts that they bought, then that will push prices back up.
Entering into short positions adds to the downward pressure. Upward pressure won't be apparent until investors start exiting their short positions.
SpyderCall OP Foodie Investor : So buying the dip would be better once we see traders exiting their short positions.
Foodie Investor : Yes yes I know. Im just trying to understand your reply to that dude why more votes on buying dips got you worried. I assumed you’re a bull from your posts so you’d want the prices to go back up.
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