Just Another Manic Monday – 14 Fed Speeches and Non-Farm Payrolls Ahead

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S&P 500 Daily Chart with 5% RuleLast week was rough.

We failed to hold the Strong Retrace Line (3,680) that had held up in June but it was the end of a bad quarter and a lot of funds don’t want embarrassing losers on their balance sheet when they report to clients so they sometimes clear the decks and buy the stocks back to start the next quarter – hoping to call them winners in 3 months.  Fun game, isn’t it?  

Between Bankster games and the uber-strong Dollar and Europe getting their gas cut off (twice) and the Fed tag-predicting PAIN!!! like a group of pro-wrestlers promoting a fight – we’re going to cut the market just a little bit of slack, but not too much – Nasdaq has to hold that 11,000 line, which it barely is.  

Nasdaq 100 Weekly with 5% Rule

What’s really critical on the Nasdaq is getting back over that 200-week moving average at 11,178 because the 50-week moving average is already in decline and, if they both turn down, we’ll be in technical Hell all the way into next year. 

And, speaking of next year.  The Fed’s attack on the money supply is working and perhaps it’s working too well as the entire planet now has less Dollars available than at any point in the last 10 years.  This is a very strong initial signal that the Fed has actually gone too far and may have to pause their increases soon.  

Meanwhile, European Manufacturing PMI has been tanking to around 48.4 in September – clearly contracting. 

Nothing too terrible.  We get our own PMI and ISM this morning along with Construction Spending and 4 Fed speeches, led off by Bostic this morning who said last week that we can get to 2% Inflation WITHOUT killing the Economy – which turned out to be the nicest thing any Fed speaker said last week.  

Stock Market Calendar

Companies that have confirmed earnings releases over the next month include Netflix #NFLX, Chipotle #CMG, Nike #NKE, Micron #MU, Comcast #CMCSA, Domino's #DPZ, UnitedHelath #UNH, Teck Resources #TECK, Union Pacific #UNP, Verizon #VZ, AT&T #T, Dow Chemical #DOW, US Bancorp #USB, Bristol-Myers Squibb #BMY, Kimco Realty #KIM, JPMorgan #JPM, Johnson & Johnson #JNJ, Ford #F, Wells Fargo #WFC, Caterpillar #CAT, Synchrony #SYF, M&T Bank #MTB, Truist #TFC, Comerica #CMA, and Zions Bancorporation #ZION.  http://eps.sh/wrs

On the whole, we’re waiting for earnings to kick off on the 14th – only a week from Friday.  Then things will get interesting.  Unless we see a lot of misses and warnings – stocks are certainly oversold.  We saw last week, in the GDP Report, that Corporate Profits are at a new record high but keep in mind a lot of that is Oil Money – which doesn’t do other companies any good and is, in fact, a rising cost of production.

So let’s be careful out there…

 

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Good Morning.

Phil,

Can you share your thoughts on the Credit Suisse news flow. Over leveraged banks…sane story as 2007-8? Worse?

Phil/Oil

My simpleton mind keeps thinking that an effort at reducing energy costs, specifically oil would help curb inflation at least in some part. Is that wrong? If we increased supply and pushed oil down to the 40’s would that not function to reduce some inflationary pressure? And, function as a massive economic stimulus? I recognize there’s a lot to consider but just curious what you would say to that as a near term effort to help move through this period of time where we are fighting to manage inflation. If it would help, why do you think we aren’t doing that? Other than stubborn politicians who don’t see this as an option? Is it way off base?

GOLD a trader sells 1000 Jan25 $17 puts for $4.10

Phil / DXCM – In the Diabetes treatment. Went public a few years ago…. seems to be well integrated with physicians and gvt. I have them growing Rev at at 35% ish, established itself pretty well in US and expanding Internationally. Debt manageable with a current ratio of 5. still in growth mode. thoughts?

Phil / DXCM – Both Abbot and MEdtronc have alternatives in the space…. They are recent entries but next level of DXCM device should leapfrog.. I agree on the PE, the international growth should provide some tail winds,.

GM ends Q3 with 359,292 vehicles in dealer inventory — “nearly three times the inventory available” at the end of Q3 2021, notes @knowledge_vital . The dramatic jump reflects “supply chain/production normalization. As supply chains normalize, so too will inflation.”

GM ended the third quarter with 359,292 vehicles in dealer inventory, including units in-transit, an increase of 111,453 units from the previous quarter. That’s nearly three times the inventory available at the end of the third quarter of 2021, when Covid-related supply chain issues impacted production.

Phil, how tight a stop do you keep on /NG?