After CPI Data, Now we are in a Honeymoon Period, Hold TSLA Target to $320
U.S. stocks jumped on Tuesday, shows the biggest combined move in stocks + bonds ( $SPDR S&P 500 ETF Trust(SPY)$ + $iShares 20+ Year Treasury Bond ETF(TLT)$ ) in a year.
And massive moves in small caps ( $iShares Russell 2000 ETF(IWM)$ +5.5%) and unprofitable tech ( $ARK Innovation ETF(ARKK)$ +5.1%). Can you say "pain trade"?
After the recent CPI data, expectations for a December rate hike went from 14% to 0%. If this is correct, the Fed will pause for the 5th consecutive month in December, and history tells us that when the Fed pauses for 5 months after a hiking cycle, the hiking cycle is over. What’s more, when the fed starts cutting, it's rarely been good news for the market.
So we're now in the honeymoon period between the last hike and the first cut, with a year-end performance chase in full swing. Cited from @simon_ree, Bestselling author of The Tao of Trading
In terms of macro signals, U.S. Dollar Index $USD Index(USDindex.FOREX)$ on track for its biggest drop in more than a year.
U.S. Treasury yields also fell. The BAC Global Research pointed that 61% of Fund Managers are predicting that long-term bond yields will be lower in 2024. This expectation surpasses even the peak of the Global Financial Crisis when only 40% of managers expected lower long-term bond yields the following year.
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If the U.S. dollar and U.S. treasury bonds start to correct, it will definitely be good for the price of risky assets.
$S&P 500(.SPX)$ says goodbye to lower highs and lower lows - win for the bulls!
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Corporate Buybacks as a % of market cap hit highest weekly level ever recorded (data going back to 2010)
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Regarding $S&P 500(.SPX)$, it may continue to hike, and also needs correction back to 60DMA.
Currently, I’m holding $Tesla Motors(TSLA)$,
All these information for communication only.
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