To The Moon

No recession in sight

Yesterday I wrote on how I was cautious going into the CPI release. To recap, I was worried that core CPI remained stubbornly high and rather unsure who will pick up the slack with regards to continued disinflation on the back of seemingly bottoming energy and food prices. As such, I was pretty cautious on how the market will continue grinding higher without the impetus of disinflation as well as the threat of recession looming on the horizon. 

Well the CPI report that came out yesterday kind of reassured me somehow. The data does not indicate an economy in recession. Quite the contrary on the other hand, it showed a resilient economy. As such, I still think that a recession is on hand still but postponed.

So short of a black swan event, I believe the market will continue to grind higher in view of the technicals and macro environment. I have been looking for the 5 wave pattern within a five wave followed by a three wave up on the broad market index which will be a strong warning sign of a potential big wave down. However I have yet to see that on almost all time frames. Hence I believe this market still has legs to move upwards. I am however still cautious moving forward and will move to a defensive posture if price and macro indicates frothy conditions ahead. In this environment, I believe big tech especially those exposed to AI are a safe haven as their technicals are still showing an uptrend as well as encouraging results and guidance. 

Disclaimer: Please kindly do your own due diligence as this is a sharing article and in no means financial advise. I am just sharing my opinions and thoughts.

Thanks for reading my commentary. Hope it helps!

Stay safe! 😊

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