2018.09.24 21:17 tenmanjonez Philadelphia Flyers Mascot
2022.04.18 22:04 Lanky_Mall_88 ~Philadelphia 76ers vs Toronto Raptors LIVE [email protected]
2019.06.25 06:31 ChampagneSupernva Philadelphia Wings
2023.06.09 23:53 two_hearted_river Clean, blue flame only possible when I completely remove air shutters, is this ok?
![]() | Recently, I got a Weber Genesis grill for free that was previously (ab)used by college students for untold years. I've started working on getting it into serviceable condition, first by cleaning a thick buildup of grease. Regrettably, I sprayed Easy-Off onto the serial number sticker, and now there's nothing to be gleaned from it. My best guess is that the grill is a Genesis 310/320 from 2011-2016, judging by the (remnants) of the ignition box: submitted by two_hearted_river to webergrills [link] [comments] https://preview.redd.it/nf3lf523d25b1.jpg?width=2134&format=pjpg&auto=webp&s=1f4eb8ed5cc2a5a408b37afba2660f26b5febf3f https://preview.redd.it/dd41o723d25b1.jpg?width=2543&format=pjpg&auto=webp&s=652c291de35bcf25e4fb96cb82e4d48be0c337b4 https://preview.redd.it/kup6f723d25b1.jpg?width=1394&format=pjpg&auto=webp&s=7ac3b1ed3d4bb3b3851de65fc319961868d59957 The grill at first burned with a completely yellow flame, so I put in a new regulator, cleaned the air shutters at the base of the burners, and set them to be completely open: https://preview.redd.it/c260thh4d25b1.jpg?width=1603&format=pjpg&auto=webp&s=e3ec28e80d488d4a8675b0c5b9a80fc395ea3f6b However, this still resulted in sizeable yellow tips on the flame, as seen on the leftmost burner: https://reddit.com/link/145i0fz/video/tp1wtd55d25b1/player In order to get the relatively clean burning flame from the center and rightmost burners in the video, I had to completely remove the air shutter at the ends: https://preview.redd.it/ok894mq6d25b1.jpg?width=2188&format=pjpg&auto=webp&s=54d4cde9737b49659e6296108bebcc08f8c3215c I've also checked the orifices to see if they were fit for LP use. They were labeled "102" for 1.02 mm, which referenced on an NG/LP conversion chart, should give around 10,000 BTUs for the burners using LP as I am, which seems par for the course. While I'd be fine to leave the air shutters completely off as in the last picture and simply put the control panel and wind screen back on and use the grill, I wanted to ask here if this doesn't pose and serious safety concerns, or if there's something else that I've possibly missed leading to the yellow flame. Thanks! |
2023.06.09 23:52 MerkurSchroeder Stick in the Front - Plug in the Back
2023.06.09 23:52 frahstyDawg [WTS] Rare Spydies š·ļø and Mice š, plus a Proper
2023.06.09 23:51 Extension_Switch_823 Moving into my new power armor pt.1
2023.06.09 23:50 two_hearted_river Clean, blue flame only possible when I completely remove air shutters, is this ok?
![]() | Recently, I got a Weber Genesis grill for free that was previously (ab)used by college students for untold years. I've started working on getting it into serviceable condition, first by cleaning a thick buildup of grease. Regrettably, I sprayed Easy-Off onto the serial number sticker, and now there's nothing to be gleaned from it. My best guess is that the grill is a Genesis 310/320 from 2011-2016, judging by the (remnants) of the ignition box: submitted by two_hearted_river to grilling [link] [comments] https://preview.redd.it/gzewqja5b25b1.jpg?width=2134&format=pjpg&auto=webp&s=8f8aec4991496aed5c5e90bf7f5012ffd08dc1dc https://preview.redd.it/d4cdwia5b25b1.jpg?width=2543&format=pjpg&auto=webp&s=1a9494cc219fa4aa20dbe87b5bae25f871f9ecd2 https://preview.redd.it/tcfk6ia5b25b1.jpg?width=1394&format=pjpg&auto=webp&s=bb8b0db45d2f893a04df87b482c35f5cc52d81c9 The grill at first burned with a completely yellow flame, so I put in a new regulator, cleaned the air shutters at the base of the burners, and set them to be completely open: https://preview.redd.it/097ynw6ra25b1.jpg?width=1603&format=pjpg&auto=webp&s=e8ae082512a134898999fe7aee2392231d6db658 However, this still resulted in sizeable yellow tips on the flame, as seen on the leftmost burner: https://reddit.com/link/145hxuy/video/i63d3ewba25b1/player In order to get the relatively clean burning flame from the center and rightmost burners in the video, I had to completely remove the air shutter at the ends: https://preview.redd.it/fr0w7idhb25b1.jpg?width=2188&format=pjpg&auto=webp&s=c787080afecf920c9cd89a611ef5b381a2e0ceb4 I've also checked the orifices to see if they were fit for LP use. They were labeled "102" for 1.02 mm, which referenced on an NG/LP conversion chart, should give around 10,000 BTUs for the burners using LP as I am, which seems par for the course. While I'd be fine to leave the air shutters completely off as in the last picture and simply put the control panel and wind screen back on and use the grill, I wanted to ask here if this doesn't pose and serious safety concerns, or if there's something else that I've possibly missed leading to the yellow flame. Thanks! |
2023.06.09 23:47 Paras1k KAT? (Random Hypothetical)
2023.06.09 23:45 next3days Weekend Rundown of Events for those in/near Blacksburg (June 9th - June 11th)
2023.06.09 23:43 Sarah_MOM_2 Please help me solve these issues with my daughter?
2023.06.09 23:42 DaddyDersch All eyes on CPI and FOMC next week⦠6-9-23 SPY/ ES Futures, QQQ and VIX Weekly Analysis and Recap
![]() | So I want to first start this off by clearing a few things up⦠Wednesday I made a post looking for $400 basically by middle of July⦠then what happened over night? Well yesterday markets called for a pump so I had to be bullish for today⦠there is a very different time frame to have on some of these posts⦠that $400 target is a 30-45dte target⦠however, I still have overnight and intraweek moves that may inverse that⦠This market is ruthless and can not make its mind up for more than a minute sometimes⦠submitted by DaddyDersch to Daytrading [link] [comments] With that being said I am bearish for Monday⦠based on todays technicals⦠we will get to that but lets talk about CPI and FOMC first⦠EVENT CALENDER https://preview.redd.it/h2j8ct01b25b1.png?width=877&format=png&auto=webp&s=0c88129a853071180476451ebdba535d96ad0abd CPI/ FOMC https://preview.redd.it/epnnu9i1b25b1.png?width=723&format=png&auto=webp&s=363ef59544492ab0f570b355ad1f14796c72491b I am waiting on bloomberg terminal numbers right now⦠hoping to get them this weekend (if anyone has access DM me⦠if not I gotta wait on one of my other sources)⦠but the way im seeing it right now is that cleveland fed nowcast and consensus are all pretty much spot on⦠the biggest thing to note here is that CPI is calling for a print in the 4s⦠we even if all goes well could see a print in the 3s! that would be wild to be honest⦠also note for next month nowcast is already calling for a 3.3% CPI print! So the question is how do we trade this and what is the market going to do? Well I would NOT trade this at all⦠why? Simple⦠its been months since we have had a decent reaction that would make the risk to reward of the payout worth it⦠Now how will the market react? https://preview.redd.it/ukw2n8x1b25b1.png?width=975&format=png&auto=webp&s=cbec2abd702de7190336c1fcd7f5ce99995434e0 As you can see here the last month things have been very up and down⦠but as of current time of writing this⦠the markets see the highest odds of a PAUSE at this meeting next week⦠now this is where I still think the markets have it wrong⦠there has been ZERO indication for JPOW about a pause⦠pretty much every time JPOW himself has actually spoken he has ALWAYS said he is going to do a 25bps hike and that there is NO RATE CUTS this year⦠now this is really where I think markets have it all wrong⦠The markets were pricing in 75bps of cuts by EOY⦠Impressively⦠the markets now have the highest odds of NO RATE CUTS by end of year.. I do think the markets finally have this correct⦠however, while the odds may be correct nowā¦. I do not see the markets reacting correctly⦠I do think if JPOW hikes 25bps on Wednesday (which is highly probable in my opinion) that we will see a negative reaction to that⦠but I do see that as a likely call entry opportunity whenever that sell off stops⦠SPY DAILY SUPPLY AND DEMAND https://preview.redd.it/eq39fsf2b25b1.png?width=975&format=png&auto=webp&s=8db68d3693dde741680ca86cfb08e1fb41ef3ce1 Well after putting that 426.6 demand in we have now immediately turned around and put a new supply in at 429.13⦠however, do you see the issue with it? We are imbalanced.. why? Simply because today we are going to close higher than where the supply is put in⦠that means markets will need to come back down OR immediately turn around and make a new demand Monday⦠One interesting thing is that since pretty much April 26th SPY has not broken through a previous demand after establishing a supply⦠what do I mean⦠I mean lets take that 410.2 demand⦠after markets put that in and put in a new supply (was around 420) the markets held that 420.1 demand and did not close below it⦠we have been stair stacking (bullishly) new demands since 404 area. However with 3 supplies here at this 428-430 area now this has become one extremely strong resistance⦠SPY WEEKLY SUPPLY AND DEMAND https://preview.redd.it/6tg0dd43b25b1.png?width=803&format=png&auto=webp&s=169aac84ff1ca9949b436c88028dc45ef5ccf1c1 There is actually no changes to the weekly time frame here⦠we closed over previous supply and did not put in a new supply⦠DMI remains overbought and SPY remains ready to put in a new supply on any red week⦠SPY DAILY PRICE ACTION https://preview.redd.it/p62k1wl3b25b1.png?width=946&format=png&auto=webp&s=d26669c8f512d99cf9a548fbfafc27818a754fe5 SPY daily here remains in this black bull channel that it has been in since May 23rd⦠we also have the bigger broad red/blue bull channel since March 8th⦠Now this is a CLASSIC bearish reversal pattern with this evening doji star closure⦠we also once again failed to close over 430.. We did close higher than the august 16th closure but we did not close over 430 yet again⦠this would be 4 failed rejections in the last 5 trading days from closing over 430. I would not be surprised to see price come back down to 426.5 demand (support) or perhaps 428 supply on Monday⦠however, I do forsee it still being bullish⦠honestly until this black bull channel is broken and really until we close under the daily 20ema this remains bullish and dips remain call opportunities⦠SPY WEEKLY PRICE ACTION https://preview.redd.it/r3p5obe4b25b1.png?width=975&format=png&auto=webp&s=b8e465acd110eabd4cb74d244142f9a6c1616385 I think this weekly chart clearly shows the overall trend and shows everything the best⦠Here you can see since the beginning of march we have been in this blue bull channel. Until SPY breaks under that weekly support (419 for next week) as you can see by the wicks this remains a buy the dip market⦠we also have a large red/ blue rising wedge that we have been trading within since middle of September⦠that resistance sits at 436.1 for next week. SPY WEEKLY LEVELS Supply- 416.08 -> 427.35 -> 453.23 Demand- 411.57 -> 381.74 Support- 428.2 -> 422.1 -> 418.6 Resistance- 430 -> 436.9 -> 444.3 FUTURES DAILY SUPPLY AND DEMAND https://preview.redd.it/dipki9w4b25b1.png?width=975&format=png&auto=webp&s=0683dd8fe15b3a5c26c7d4af16187b935e653850 Not surprisingly here futures followed suit of SPY and also put in a new supply at 4298. We actually are imbalanced on futures which does not usually happen. So that will be interesting to watch get sorted out over next week.. as of right now futes minimally needs to close under 4299 in order to be balanced. 4312 is the supply and resistance from the august high and we once again failed to close over that level⦠it is safe to assume for now 4312 is strong resistance. FUTURES WEEKLY SUPPLY AND DEMAND https://preview.redd.it/68hwi3g5b25b1.png?width=872&format=png&auto=webp&s=d76cd94049299ac20a595cb65b68df41acca2d62 No changes to futures weekly supply and demand⦠we are attempting to make 4284 into a support, however, it is not set up to turn it into a demand which would be incredible bullish. NOTE ON FUTURES- on tradingview (where I primarily chart) the contracts rolled over night and when that happens the charting is always messed up for about a week because there was about a 100pt gap up due to that⦠there is a way to adjust for contracts but none of my levels are adjusted for that so it would throw everything off⦠for now I wont be including Futes daily or weekly price action until things normalize some⦠I will not include support/ resistance either as it is incorrect. FUTURES WEEKLY LEVELS- Supply weekly- 4193 -> 4284 -> 4540 Supply daily- 4240 -> 4292 -> 4298 -> 4312 Demand weekly- 4130 -> 3921 Demand daily- 4273 -> 4188 QQQ DAILY SUPPLY AND DEMAND https://preview.redd.it/sjlguh16b25b1.png?width=975&format=png&auto=webp&s=3b233a830548e89abd8036fe6bf877e137426937 Now I said yesterday I was VERY bullish on QQQ and that I was looking for 358-361⦠we ended up coming super close at open with hitting 357.66 but we did come up and retest that 357.09 supply and once again failed to break through and close over that level⦠we actually have really turned 354.95 supply into a major resistance here with this being the 5th rejection in 6 days at this level⦠Now we did put in a new demand at 349.06 today⦠however, I will say I am VERY bearish on QQQ for Monday⦠I would not be surprised at all to see QQQ come back down to at least 351 on Monday⦠If you look at QQQ objectively since 5/26 it has been holding within a 347.93 to 357.09 range for 10 closes in a row now⦠this right now is our consolidation period/ range⦠QQQ likely could drop down to 350-351 Monday and could possibly put in a new supply at 354.5 area.. if it did that then we absolutely would look for 348-349 to bounce us and look to long it back to 357. However, IF we can retrace to 349-351 and not put in a new supply I would actually be even more bullish and would look for 361.7 demand to be taken out next week. Now daily DMI is waving up which is bullish and we did hold the daily 8ema today⦠however, that massive evening doji star bearish reversal candle certainly should result in a drop⦠daily also broke extreme bull momentum⦠QQQ WEEKLY SUPPLY AND DEMAND https://preview.redd.it/knxrjnq7b25b1.png?width=975&format=png&auto=webp&s=5c72f8bb4736e6e6aaf6eb7859f7b294094ed6e9 Now on QQQ weekly here this is looking far more bearish⦠we just put in a double top with back to back dojis with a weekly supply at 354.65. This is our first supply since the first week of May. Now only that but we also have a weekly DMI wave down forming here on QQQ. I will say though that despite this bearish set up that we have here⦠QQQ weekly remains in extreme bull momentum (despite the daily losing it) which means the weekly 8ema likely will be support on any retrace⦠that weekly 8ema should sit somewhere near 340 next week. Impressively QQQ weekly has NOT broken through the 8ema since the first week of may (5 weeks in a row) and we have not closed under the weekly 8ema since the week of March 6th. As you can see we are working on a yellow rising wedge since the week of December 12th. For me we have that 330.67 supply to keep an eye on next week⦠However, that would not only break the weekly 8ema but would also break the 6 month long rising wedge support⦠I do not think QQQ has seen the weakness and top to do that⦠likely weekly support will sit at 337.7 at the lowest next week but I will look for 339-340 to be a bounce point. On the upside if we immediately bounce higher next week we actually could turn this weekly 354.65 supply immediately into a demand which would be incredibly bullish. Upside resistance of the wedge sits at 359.94 and we have a weekly supply at 361.85 to keep an eye on. QQQ WEEKLY LEVELS Supply- 330.67 -> 354.65 -> 361.85 Demand- 322.47 -> 316.18 VIX https://preview.redd.it/lxrruca8b25b1.png?width=975&format=png&auto=webp&s=8cdb883c72a724b9d035f9b9825f04e850167823 Even though it looked like the VIX would never recover and was just going to keep falling and falling and fallingā¦. We actually did it⦠we actually put in a new daily demand (support) on the VIX at 13.62! This is our first demand the VIX has put in since May 18th⦠Fun fact about the VIX and putting in Demands (taking the move from low to high of when VIX puts in a demand till its next supply)⦠March 6th= VIX +65.6%, SPY -6.5% March 14th= VIX +34.1%, SPY -2.5% March 21st= VIX +16.9%, SPY -2.3% April 4th= VIX +8.1%, SPY -1.42% April 6th= VIX +9%, SPY +0.71% April 18th= VIX +20%, SPY -2.9% May 1st= VIX +37.2%, SPY -3.3% May 11th= VIX +9.6%, SPY -0.6% May 18th= VIX +29.9%, SPY -2.6% This is becoming my new favorite thing to do⦠What does this show? On average over the last 9 times the VIX has put a new demand (support) in it has bounced 25.6% and SPY has fallen -2.38%. There is one time in April though where SPY did randomly push higher despite the VIX pushing up 9%... But what does this mean? Well this means that if this plays out like normal the VIX will see around $17 and SPY could drop to $421.7 before we put a new supply in on the VIX (I will calculate that out once that happens). Now thre is always the chance with low daily volatility and daily/ weekly extreme bear momentum that we do not do that and immediately turn around and put a new supply in⦠but I will say since November there has not been a time we have seen with the supply indicator this low that we have immediately turned around a put a new supply in⦠The highest probability is that we see a bounce here on the VIX and drop on SPY⦠we also broke the 12 day long bear channel today⦠the next step is for bears to close VIX over the daily 8ema and this should breakout. Next week with CPI and FOMC truly could be really spicy⦠WEEKLY TRADING LOG https://preview.redd.it/uw0rcrs8b25b1.png?width=974&format=png&auto=webp&s=8aefe1f710dd06c7c3f4258929ba4b9cba7c5561 Well I wasnāt supposed to be trading today⦠but ended up getting home earlier than expected and was able to get some solid trading in today. Today was a refreshing breath of air after getting absolutely wrecked yesterday⦠today was perfect trading and felt perfect to trade, however, after about 145 I will say that we once again say internals not matching correctly⦠Overall I failed to reach my weekly profit goal but on an extremely positive note here I was able to break the curse of Fridays by putting in a green day (even after realizing my tsla loss). This close out as a nice green week and I am not too upset with the results especially after how brutal yesterday was. I have now been green for the last 10 weeks in a row which is one week shorter than my longest weekly streak in 2022! I hope you guys all have a great weekend and I will see you guys next week! |
2023.06.09 23:40 TonyExtremis Walmart 2601 Remodel
2023.06.09 23:40 DaddyDersch All eyes on CPI and FOMC next week⦠6-9-23 SPY/ ES Futures, QQQ and VIX Weekly Analysis and Recap
![]() | So I want to first start this off by clearing a few things up⦠Wednesday I made a post looking for $400 basically by middle of July⦠then what happened over night? Well yesterday markets called for a pump so I had to be bullish for today⦠there is a very different time frame to have on some of these posts⦠that $400 target is a 30-45dte target⦠however, I still have overnight and intraweek moves that may inverse that⦠This market is ruthless and can not make its mind up for more than a minute sometimes⦠submitted by DaddyDersch to wallstreetbets [link] [comments] With that being said I am bearish for Monday⦠based on todays technicals⦠we will get to that but lets talk about CPI and FOMC first⦠EVENT CALENDER https://preview.redd.it/vdvc1xsra25b1.png?width=877&format=png&auto=webp&s=856d68d20c8024195ae60ded1065d4eb330bc50d CPI/ FOMC https://preview.redd.it/pb5ceqdsa25b1.png?width=723&format=png&auto=webp&s=65a0d5f3c8f957fc36b9ba995afd4e1d5014f011 I am waiting on bloomberg terminal numbers right now⦠hoping to get them this weekend (if anyone has access DM me⦠if not I gotta wait on one of my other sources)⦠but the way im seeing it right now is that cleveland fed nowcast and consensus are all pretty much spot on⦠the biggest thing to note here is that CPI is calling for a print in the 4s⦠we even if all goes well could see a print in the 3s! that would be wild to be honest⦠also note for next month nowcast is already calling for a 3.3% CPI print! So the question is how do we trade this and what is the market going to do? Well I would NOT trade this at all⦠why? Simple⦠its been months since we have had a decent reaction that would make the risk to reward of the payout worth it⦠Now how will the market react? https://preview.redd.it/yrpc2wqsa25b1.png?width=975&format=png&auto=webp&s=e7ace0c7cad3059aaf407f893cf154eed7453e57 As you can see here the last month things have been very up and down⦠but as of current time of writing this⦠the markets see the highest odds of a PAUSE at this meeting next week⦠now this is where I still think the markets have it wrong⦠there has been ZERO indication for JPOW about a pause⦠pretty much every time JPOW himself has actually spoken he has ALWAYS said he is going to do a 25bps hike and that there is NO RATE CUTS this year⦠now this is really where I think markets have it all wrong⦠The markets were pricing in 75bps of cuts by EOY⦠Impressively⦠the markets now have the highest odds of NO RATE CUTS by end of year.. I do think the markets finally have this correct⦠however, while the odds may be correct nowā¦. I do not see the markets reacting correctly⦠I do think if JPOW hikes 25bps on Wednesday (which is highly probable in my opinion) that we will see a negative reaction to that⦠but I do see that as a likely call entry opportunity whenever that sell off stops⦠SPY DAILY SUPPLY AND DEMAND https://preview.redd.it/mlrqya6ta25b1.png?width=975&format=png&auto=webp&s=2a445f6d02a1ef279bea32f5dd85c06c04a358bf Well after putting that 426.6 demand in we have now immediately turned around and put a new supply in at 429.13⦠however, do you see the issue with it? We are imbalanced.. why? Simply because today we are going to close higher than where the supply is put in⦠that means markets will need to come back down OR immediately turn around and make a new demand Monday⦠One interesting thing is that since pretty much April 26th SPY has not broken through a previous demand after establishing a supply⦠what do I mean⦠I mean lets take that 410.2 demand⦠after markets put that in and put in a new supply (was around 420) the markets held that 420.1 demand and did not close below it⦠we have been stair stacking (bullishly) new demands since 404 area. However with 3 supplies here at this 428-430 area now this has become one extremely strong resistance⦠SPY WEEKLY SUPPLY AND DEMAND https://preview.redd.it/w0h22ylta25b1.png?width=803&format=png&auto=webp&s=328ae274417d5ac3e16365177fb9e9712cae77b8 There is actually no changes to the weekly time frame here⦠we closed over previous supply and did not put in a new supply⦠DMI remains overbought and SPY remains ready to put in a new supply on any red week⦠SPY DAILY PRICE ACTION https://preview.redd.it/le6b011ua25b1.png?width=946&format=png&auto=webp&s=bd6d6c3daaaa61ceb3925b29efad98934592944b SPY daily here remains in this black bull channel that it has been in since May 23rd⦠we also have the bigger broad red/blue bull channel since March 8th⦠Now this is a CLASSIC bearish reversal pattern with this evening doji star closure⦠we also once again failed to close over 430.. We did close higher than the august 16th closure but we did not close over 430 yet again⦠this would be 4 failed rejections in the last 5 trading days from closing over 430. I would not be surprised to see price come back down to 426.5 demand (support) or perhaps 428 supply on Monday⦠however, I do forsee it still being bullish⦠honestly until this black bull channel is broken and really until we close under the daily 20ema this remains bullish and dips remain call opportunities⦠SPY WEEKLY PRICE ACTION https://preview.redd.it/8l2cfofua25b1.png?width=975&format=png&auto=webp&s=5c964c3f964cfed75a2628c52e62a6eb262a4d85 I think this weekly chart clearly shows the overall trend and shows everything the best⦠Here you can see since the beginning of march we have been in this blue bull channel. Until SPY breaks under that weekly support (419 for next week) as you can see by the wicks this remains a buy the dip market⦠we also have a large red/ blue rising wedge that we have been trading within since middle of September⦠that resistance sits at 436.1 for next week. SPY WEEKLY LEVELS Supply- 416.08 -> 427.35 -> 453.23 Demand- 411.57 -> 381.74 Support- 428.2 -> 422.1 -> 418.6 Resistance- 430 -> 436.9 -> 444.3 FUTURES DAILY SUPPLY AND DEMAND https://preview.redd.it/uxbf4bwua25b1.png?width=975&format=png&auto=webp&s=ffeb1ba116d722e6249efb70eb79a7c2be07a8c8 Not surprisingly here futures followed suit of SPY and also put in a new supply at 4298. We actually are imbalanced on futures which does not usually happen. So that will be interesting to watch get sorted out over next week.. as of right now futes minimally needs to close under 4299 in order to be balanced. 4312 is the supply and resistance from the august high and we once again failed to close over that level⦠it is safe to assume for now 4312 is strong resistance. FUTURES WEEKLY SUPPLY AND DEMAND https://preview.redd.it/bzs6k4eva25b1.png?width=872&format=png&auto=webp&s=41dd38c5f847267a5a71b3c335710331cfa4c030 No changes to futures weekly supply and demand⦠we are attempting to make 4284 into a support, however, it is not set up to turn it into a demand which would be incredible bullish. NOTE ON FUTURES- on tradingview (where I primarily chart) the contracts rolled over night and when that happens the charting is always messed up for about a week because there was about a 100pt gap up due to that⦠there is a way to adjust for contracts but none of my levels are adjusted for that so it would throw everything off⦠for now I wont be including Futes daily or weekly price action until things normalize some⦠I will not include support/ resistance either as it is incorrect. FUTURES WEEKLY LEVELS- Supply weekly- 4193 -> 4284 -> 4540 Supply daily- 4240 -> 4292 -> 4298 -> 4312 Demand weekly- 4130 -> 3921 Demand daily- 4273 -> 4188 QQQ DAILY SUPPLY AND DEMAND https://preview.redd.it/7f36vzwva25b1.png?width=975&format=png&auto=webp&s=e79268ef4aa2a961783ffdd614855c0d01ec87c7 Now I said yesterday I was VERY bullish on QQQ and that I was looking for 358-361⦠we ended up coming super close at open with hitting 357.66 but we did come up and retest that 357.09 supply and once again failed to break through and close over that level⦠we actually have really turned 354.95 supply into a major resistance here with this being the 5th rejection in 6 days at this level⦠Now we did put in a new demand at 349.06 today⦠however, I will say I am VERY bearish on QQQ for Monday⦠I would not be surprised at all to see QQQ come back down to at least 351 on Monday⦠If you look at QQQ objectively since 5/26 it has been holding within a 347.93 to 357.09 range for 10 closes in a row now⦠this right now is our consolidation period/ range⦠QQQ likely could drop down to 350-351 Monday and could possibly put in a new supply at 354.5 area.. if it did that then we absolutely would look for 348-349 to bounce us and look to long it back to 357. However, IF we can retrace to 349-351 and not put in a new supply I would actually be even more bullish and would look for 361.7 demand to be taken out next week. Now daily DMI is waving up which is bullish and we did hold the daily 8ema today⦠however, that massive evening doji star bearish reversal candle certainly should result in a drop⦠daily also broke extreme bull momentum⦠QQQ WEEKLY SUPPLY AND DEMAND https://preview.redd.it/0vub7bdwa25b1.png?width=975&format=png&auto=webp&s=468c5bed6bc49e77f5eebc021727384b98e5ced4 Now on QQQ weekly here this is looking far more bearish⦠we just put in a double top with back to back dojis with a weekly supply at 354.65. This is our first supply since the first week of May. Now only that but we also have a weekly DMI wave down forming here on QQQ. I will say though that despite this bearish set up that we have here⦠QQQ weekly remains in extreme bull momentum (despite the daily losing it) which means the weekly 8ema likely will be support on any retrace⦠that weekly 8ema should sit somewhere near 340 next week. Impressively QQQ weekly has NOT broken through the 8ema since the first week of may (5 weeks in a row) and we have not closed under the weekly 8ema since the week of March 6th. As you can see we are working on a yellow rising wedge since the week of December 12th. For me we have that 330.67 supply to keep an eye on next week⦠However, that would not only break the weekly 8ema but would also break the 6 month long rising wedge support⦠I do not think QQQ has seen the weakness and top to do that⦠likely weekly support will sit at 337.7 at the lowest next week but I will look for 339-340 to be a bounce point. On the upside if we immediately bounce higher next week we actually could turn this weekly 354.65 supply immediately into a demand which would be incredibly bullish. Upside resistance of the wedge sits at 359.94 and we have a weekly supply at 361.85 to keep an eye on. QQQ WEEKLY LEVELS Supply- 330.67 -> 354.65 -> 361.85 Demand- 322.47 -> 316.18 VIX https://preview.redd.it/1g1n41wwa25b1.png?width=975&format=png&auto=webp&s=544aa2aba58196017243902170ee9f97fc4fe80f Even though it looked like the VIX would never recover and was just going to keep falling and falling and fallingā¦. We actually did it⦠we actually put in a new daily demand (support) on the VIX at 13.62! This is our first demand the VIX has put in since May 18th⦠Fun fact about the VIX and putting in Demands (taking the move from low to high of when VIX puts in a demand till its next supply)⦠March 6th= VIX +65.6%, SPY -6.5% March 14th= VIX +34.1%, SPY -2.5% March 21st= VIX +16.9%, SPY -2.3% April 4th= VIX +8.1%, SPY -1.42% April 6th= VIX +9%, SPY +0.71% April 18th= VIX +20%, SPY -2.9% May 1st= VIX +37.2%, SPY -3.3% May 11th= VIX +9.6%, SPY -0.6% May 18th= VIX +29.9%, SPY -2.6% This is becoming my new favorite thing to do⦠What does this show? On average over the last 9 times the VIX has put a new demand (support) in it has bounced 25.6% and SPY has fallen -2.38%. There is one time in April though where SPY did randomly push higher despite the VIX pushing up 9%... But what does this mean? Well this means that if this plays out like normal the VIX will see around $17 and SPY could drop to $421.7 before we put a new supply in on the VIX (I will calculate that out once that happens). Now thre is always the chance with low daily volatility and daily/ weekly extreme bear momentum that we do not do that and immediately turn around and put a new supply in⦠but I will say since November there has not been a time we have seen with the supply indicator this low that we have immediately turned around a put a new supply in⦠The highest probability is that we see a bounce here on the VIX and drop on SPY⦠we also broke the 12 day long bear channel today⦠the next step is for bears to close VIX over the daily 8ema and this should breakout. Next week with CPI and FOMC truly could be really spicy⦠WEEKLY TRADING LOG https://preview.redd.it/lim9sh9ya25b1.png?width=974&format=png&auto=webp&s=9b9623f764a2b1248dd8a16aae5fc1e87e8751ff Well I wasnāt supposed to be trading today⦠but ended up getting home earlier than expected and was able to get some solid trading in today. Today was a refreshing breath of air after getting absolutely wrecked yesterday⦠today was perfect trading and felt perfect to trade, however, after about 145 I will say that we once again say internals not matching correctly⦠Overall I failed to reach my weekly profit goal but on an extremely positive note here I was able to break the curse of Fridays by putting in a green day (even after realizing my tsla loss). This close out as a nice green week and I am not too upset with the results especially after how brutal yesterday was. I have now been green for the last 10 weeks in a row which is one week shorter than my longest weekly streak in 2022! I hope you guys all have a great weekend and I will see you guys next week! |
2023.06.09 23:39 DaddyDersch All eyes on CPI and FOMC next week⦠6-9-23 SPY/ ES Futures, QQQ and VIX Weekly Analysis and Recap
![]() | So I want to first start this off by clearing a few things up⦠Wednesday I made a post looking for $400 basically by middle of July⦠then what happened over night? Well yesterday markets called for a pump so I had to be bullish for today⦠there is a very different time frame to have on some of these posts⦠that $400 target is a 30-45dte target⦠however, I still have overnight and intraweek moves that may inverse that⦠This market is ruthless and can not make its mind up for more than a minute sometimes⦠submitted by DaddyDersch to u/DaddyDersch [link] [comments] With that being said I am bearish for Monday⦠based on todays technicals⦠we will get to that but lets talk about CPI and FOMC first⦠EVENT CALENDER https://preview.redd.it/ntmsk1cia25b1.png?width=877&format=png&auto=webp&s=c37d675d41d991d3551581a606e5ebc2781425c4 CPI/ FOMC https://preview.redd.it/0i4jq0tia25b1.png?width=723&format=png&auto=webp&s=128e23e3c44da4369c1dcb320d6d80c59ad9691f I am waiting on bloomberg terminal numbers right now⦠hoping to get them this weekend (if anyone has access DM me⦠if not I gotta wait on one of my other sources)⦠but the way im seeing it right now is that cleveland fed nowcast and consensus are all pretty much spot on⦠the biggest thing to note here is that CPI is calling for a print in the 4s⦠we even if all goes well could see a print in the 3s! that would be wild to be honest⦠also note for next month nowcast is already calling for a 3.3% CPI print! So the question is how do we trade this and what is the market going to do? Well I would NOT trade this at all⦠why? Simple⦠its been months since we have had a decent reaction that would make the risk to reward of the payout worth it⦠Now how will the market react? https://preview.redd.it/f66jg67ja25b1.png?width=975&format=png&auto=webp&s=a3f0bedea7bd1e0b03d179c0aa00e3343e6d7120 As you can see here the last month things have been very up and down⦠but as of current time of writing this⦠the markets see the highest odds of a PAUSE at this meeting next week⦠now this is where I still think the markets have it wrong⦠there has been ZERO indication for JPOW about a pause⦠pretty much every time JPOW himself has actually spoken he has ALWAYS said he is going to do a 25bps hike and that there is NO RATE CUTS this year⦠now this is really where I think markets have it all wrong⦠The markets were pricing in 75bps of cuts by EOY⦠Impressively⦠the markets now have the highest odds of NO RATE CUTS by end of year.. I do think the markets finally have this correct⦠however, while the odds may be correct nowā¦. I do not see the markets reacting correctly⦠I do think if JPOW hikes 25bps on Wednesday (which is highly probable in my opinion) that we will see a negative reaction to that⦠but I do see that as a likely call entry opportunity whenever that sell off stops⦠SPY DAILY SUPPLY AND DEMAND https://preview.redd.it/37nzgcoja25b1.png?width=975&format=png&auto=webp&s=beb0429c61f63154217a3312012b0791a67bd0a9 Well after putting that 426.6 demand in we have now immediately turned around and put a new supply in at 429.13⦠however, do you see the issue with it? We are imbalanced.. why? Simply because today we are going to close higher than where the supply is put in⦠that means markets will need to come back down OR immediately turn around and make a new demand Monday⦠One interesting thing is that since pretty much April 26th SPY has not broken through a previous demand after establishing a supply⦠what do I mean⦠I mean lets take that 410.2 demand⦠after markets put that in and put in a new supply (was around 420) the markets held that 420.1 demand and did not close below it⦠we have been stair stacking (bullishly) new demands since 404 area. However with 3 supplies here at this 428-430 area now this has become one extremely strong resistance⦠SPY WEEKLY SUPPLY AND DEMAND https://preview.redd.it/dt9tk65ka25b1.png?width=803&format=png&auto=webp&s=e43d31e346f866864d8f1f8bdec87e8afd7705eb There is actually no changes to the weekly time frame here⦠we closed over previous supply and did not put in a new supply⦠DMI remains overbought and SPY remains ready to put in a new supply on any red week⦠SPY DAILY PRICE ACTION https://preview.redd.it/8d4w4cmka25b1.png?width=946&format=png&auto=webp&s=1602d4493f652ff4a2e3f90a6684dcce9105423b SPY daily here remains in this black bull channel that it has been in since May 23rd⦠we also have the bigger broad red/blue bull channel since March 8th⦠Now this is a CLASSIC bearish reversal pattern with this evening doji star closure⦠we also once again failed to close over 430.. We did close higher than the august 16th closure but we did not close over 430 yet again⦠this would be 4 failed rejections in the last 5 trading days from closing over 430. I would not be surprised to see price come back down to 426.5 demand (support) or perhaps 428 supply on Monday⦠however, I do forsee it still being bullish⦠honestly until this black bull channel is broken and really until we close under the daily 20ema this remains bullish and dips remain call opportunities⦠SPY WEEKLY PRICE ACTION https://preview.redd.it/ixppty3la25b1.png?width=975&format=png&auto=webp&s=1f87468e9f4069cbf1f940772c7974c3f0245d67 I think this weekly chart clearly shows the overall trend and shows everything the best⦠Here you can see since the beginning of march we have been in this blue bull channel. Until SPY breaks under that weekly support (419 for next week) as you can see by the wicks this remains a buy the dip market⦠we also have a large red/ blue rising wedge that we have been trading within since middle of September⦠that resistance sits at 436.1 for next week. SPY WEEKLY LEVELS Supply- 416.08 -> 427.35 -> 453.23 Demand- 411.57 -> 381.74 Support- 428.2 -> 422.1 -> 418.6 Resistance- 430 -> 436.9 -> 444.3 FUTURES DAILY SUPPLY AND DEMAND https://preview.redd.it/kx0gzspla25b1.png?width=975&format=png&auto=webp&s=db649f5b552b3aed3a9e6c4e76ec6582a7ef46a8 Not surprisingly here futures followed suit of SPY and also put in a new supply at 4298. We actually are imbalanced on futures which does not usually happen. So that will be interesting to watch get sorted out over next week.. as of right now futes minimally needs to close under 4299 in order to be balanced. 4312 is the supply and resistance from the august high and we once again failed to close over that level⦠it is safe to assume for now 4312 is strong resistance. FUTURES WEEKLY SUPPLY AND DEMAND https://preview.redd.it/svdlwnbma25b1.png?width=872&format=png&auto=webp&s=14acae6419a030a8aeb9c1e2fc9b427efa2c2d3d No changes to futures weekly supply and demand⦠we are attempting to make 4284 into a support, however, it is not set up to turn it into a demand which would be incredible bullish. NOTE ON FUTURES- on tradingview (where I primarily chart) the contracts rolled over night and when that happens the charting is always messed up for about a week because there was about a 100pt gap up due to that⦠there is a way to adjust for contracts but none of my levels are adjusted for that so it would throw everything off⦠for now I wont be including Futes daily or weekly price action until things normalize some⦠I will not include support/ resistance either as it is incorrect. FUTURES WEEKLY LEVELS- Supply weekly- 4193 -> 4284 -> 4540 Supply daily- 4240 -> 4292 -> 4298 -> 4312 Demand weekly- 4130 -> 3921 Demand daily- 4273 -> 4188 QQQ DAILY SUPPLY AND DEMAND https://preview.redd.it/t27jd4uma25b1.png?width=975&format=png&auto=webp&s=d7a420b28f8197059f3661f5c76c13de586309a9 Now I said yesterday I was VERY bullish on QQQ and that I was looking for 358-361⦠we ended up coming super close at open with hitting 357.66 but we did come up and retest that 357.09 supply and once again failed to break through and close over that level⦠we actually have really turned 354.95 supply into a major resistance here with this being the 5th rejection in 6 days at this level⦠Now we did put in a new demand at 349.06 today⦠however, I will say I am VERY bearish on QQQ for Monday⦠I would not be surprised at all to see QQQ come back down to at least 351 on Monday⦠If you look at QQQ objectively since 5/26 it has been holding within a 347.93 to 357.09 range for 10 closes in a row now⦠this right now is our consolidation period/ range⦠QQQ likely could drop down to 350-351 Monday and could possibly put in a new supply at 354.5 area.. if it did that then we absolutely would look for 348-349 to bounce us and look to long it back to 357. However, IF we can retrace to 349-351 and not put in a new supply I would actually be even more bullish and would look for 361.7 demand to be taken out next week. Now daily DMI is waving up which is bullish and we did hold the daily 8ema today⦠however, that massive evening doji star bearish reversal candle certainly should result in a drop⦠daily also broke extreme bull momentum⦠QQQ WEEKLY SUPPLY AND DEMAND https://preview.redd.it/w2cyodena25b1.png?width=975&format=png&auto=webp&s=91cb41721eb6ba34f7ce65e253b6559dc20f5cad Now on QQQ weekly here this is looking far more bearish⦠we just put in a double top with back to back dojis with a weekly supply at 354.65. This is our first supply since the first week of May. Now only that but we also have a weekly DMI wave down forming here on QQQ. I will say though that despite this bearish set up that we have here⦠QQQ weekly remains in extreme bull momentum (despite the daily losing it) which means the weekly 8ema likely will be support on any retrace⦠that weekly 8ema should sit somewhere near 340 next week. Impressively QQQ weekly has NOT broken through the 8ema since the first week of may (5 weeks in a row) and we have not closed under the weekly 8ema since the week of March 6th. As you can see we are working on a yellow rising wedge since the week of December 12th. For me we have that 330.67 supply to keep an eye on next week⦠However, that would not only break the weekly 8ema but would also break the 6 month long rising wedge support⦠I do not think QQQ has seen the weakness and top to do that⦠likely weekly support will sit at 337.7 at the lowest next week but I will look for 339-340 to be a bounce point. On the upside if we immediately bounce higher next week we actually could turn this weekly 354.65 supply immediately into a demand which would be incredibly bullish. Upside resistance of the wedge sits at 359.94 and we have a weekly supply at 361.85 to keep an eye on. QQQ WEEKLY LEVELS Supply- 330.67 -> 354.65 -> 361.85 Demand- 322.47 -> 316.18 VIX https://preview.redd.it/vpt87ypoa25b1.png?width=975&format=png&auto=webp&s=85982d70d65880ab5b59bef5137b2a007ee4f330 Even though it looked like the VIX would never recover and was just going to keep falling and falling and fallingā¦. We actually did it⦠we actually put in a new daily demand (support) on the VIX at 13.62! This is our first demand the VIX has put in since May 18th⦠Fun fact about the VIX and putting in Demands (taking the move from low to high of when VIX puts in a demand till its next supply)⦠March 6th= VIX +65.6%, SPY -6.5% March 14th= VIX +34.1%, SPY -2.5% March 21st= VIX +16.9%, SPY -2.3% April 4th= VIX +8.1%, SPY -1.42% April 6th= VIX +9%, SPY +0.71% April 18th= VIX +20%, SPY -2.9% May 1st= VIX +37.2%, SPY -3.3% May 11th= VIX +9.6%, SPY -0.6% May 18th= VIX +29.9%, SPY -2.6% This is becoming my new favorite thing to do⦠What does this show? On average over the last 9 times the VIX has put a new demand (support) in it has bounced 25.6% and SPY has fallen -2.38%. There is one time in April though where SPY did randomly push higher despite the VIX pushing up 9%... But what does this mean? Well this means that if this plays out like normal the VIX will see around $17 and SPY could drop to $421.7 before we put a new supply in on the VIX (I will calculate that out once that happens). Now thre is always the chance with low daily volatility and daily/ weekly extreme bear momentum that we do not do that and immediately turn around and put a new supply in⦠but I will say since November there has not been a time we have seen with the supply indicator this low that we have immediately turned around a put a new supply in⦠The highest probability is that we see a bounce here on the VIX and drop on SPY⦠we also broke the 12 day long bear channel today⦠the next step is for bears to close VIX over the daily 8ema and this should breakout. Next week with CPI and FOMC truly could be really spicy⦠WEEKLY TRADING LOG https://preview.redd.it/qyf6hg9pa25b1.png?width=974&format=png&auto=webp&s=db67d531b4556d96212793314679824a4bb124b9 Well I wasnāt supposed to be trading today⦠but ended up getting home earlier than expected and was able to get some solid trading in today. Today was a refreshing breath of air after getting absolutely wrecked yesterday⦠today was perfect trading and felt perfect to trade, however, after about 145 I will say that we once again say internals not matching correctly⦠Overall I failed to reach my weekly profit goal but on an extremely positive note here I was able to break the curse of Fridays by putting in a green day (even after realizing my tsla loss). This close out as a nice green week and I am not too upset with the results especially after how brutal yesterday was. I have now been green for the last 10 weeks in a row which is one week shorter than my longest weekly streak in 2022! I hope you guys all have a great weekend and I will see you guys next week! |
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ļø submitted by AutoModerator to GenkiCourses_Cheapest [link] [comments] Get the course here: [Genkicourses.site] āļøJohn Anthony ā The Leads Machine āļø Full Course Download https://preview.redd.it/pjqy0t8w6x4b1.jpg?width=600&format=pjpg&auto=webp&s=1ef1f963810d4f668a98389cbccfe80404248136 Courses proof (screenshots for example, or 1 free sample video from the course) are available upon demand, simply Contact us here A āleadā is simply a phone number that you get from a girl.In a bar, nightclub, at a mall, at a coffee shop, on the street, etc, the key to sleeping with boatloads of beautiful women is systematically and optimally turning these phone number āLEADSā into meetups (dates) and then into āSEXā.It will then be your choice if you want to keep the girl around to be part of your āharemā or make her your girlfriend. So you can think of the process like this: Acquire phone number āleadā ā Work the lead properly for a meetup (date) ā close the lead (have sex) ā retain the girl ā repeat the process until you have your dream āharemā or ādream girlfriendā. So as I near the big 1,000 laycount milestone, I decided to spill the beans on my ENTIRE āsecret sauceā in FULL DETAIL. My secret to systematically having sex with 100+ new girls every year. For those of you who look at my high number of lays as being suspicious, I donāt blame you. But I have documented proof with 100s of hidden camera infield footage videos of me picking up women ā which is more than any other pickup artist in the world has ever recorded. NO WONDER I HAD 245 NEW LAYS LAST YEAR! No lead is waster Thatās my secret: working leads like a machine. I got the first highly optimized lead system for dating figured out, I want to give back to the men out there that are struggling. Leverage my years of frustrations to get laid immediately. What is the system? I call it The Lead Machine. Why Machine? Because it works like a damn well-oiled machine! Just put leads in and get pussy out! Here is a sneak peak of what is included: Massive Master flowchart āā Screenshots of conversations utilizing different parts of the chart Dates Masterclass videos from Occamās Razor Videos About Dates Straight to the House Videos About Closing at the House Excel Spreadsheet Template for Organizing and Tracking Leads Itās time to end that frustration, and stop wasting so much energy. And that for a fraction of the money you are spending away inefficiently. Stop wasting time and energy. You donāt have to figure it out all over again. I did that for you. Been there done that. So here I am offering the product of over ten years of optimizations, and first hand experience. |
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![]() | Anyone been to the new location recently? Randomly popped in yesterday just to check it out and may go tonight to pick up a sandwich or frozen item. Thereās even a little bar area where you can sit or additional seating as well. Love the names to the sandwichās, personally. submitted by CaroylOldersee to raleigh [link] [comments] |
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2023.06.09 23:31 bigbear0083 Wall Street Week Ahead for the trading week beginning June 12th, 2023
The S&P 500 rose slightly Friday, touching the 4,300 level for the first time since August 2022 as investors looked ahead to upcoming inflation data and the Federal Reserveās latest policy announcement.
The broad-market index gained 0.11%, closing at 4,298.86. The Nasdaq Composite rose 0.16% to end at 13,259.14. The Dow Jones Industrial Average traded up 43.17 points, or 0.13%, closing at 33,876.78. It was the 30-stock Dowās fourth consecutive positive day.
For the week, the S&P 500 was up 0.39%. This was the broad-market indexās fourth straight winning week ā a feat it last accomplished in August. The Nasdaq was up about 0.14%, posting its seventh straight winning week ā its first streak of that length since November 2019. The Dow advanced 0.34%.
Investors were encouraged by signs that a broader swath of stocks, including small-cap equities, was participating in the recent rally. The Russell 2000 was down slightly on the day, but notched a weekly gain of 1.9%.
āItās the first time in a while where investors seem to be feeling a greater sense of certainty. And we think thatās been a turning point from what had been more of a bearish cautious sentiment,ā said Greg Bassuk, CEO at AXS Investments.
āWe think that as we walk through these next few weeks, that will be increasingly clear that the economy is more resilient than folks have given it credit for the last six months,ā said Scott Ladner, chief investment officer at Horizon Investments. āThat will sort of dawn on people that small-caps and cyclicals probably have a reasonable shot to play catch up.ā
The market is also looking toward next weekās consumer price index numbers and the Federal Open Market Committee meeting. Markets are currently anticipating a more than 71% probability the central bank will pause on rate hikes at the June meeting, according to the CME FedWatch Tool.
Juneās Quad Witching Options Expiration Riddled With Volatility
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The second Triple Witching Week (Quadruple Witching if you prefer) of the year brings on some volatile trading with losses frequently exceeding gains. NASDAQ has the weakest record on the first trading day of the week. Triple-Witching Friday is usually better, S&P 500 has been up 12 of the last 20 years, but down 6 of the last 8.
Full-week performance is choppy as well, littered with greater than 1% moves in both directions. The week after Juneās Triple-Witching Day is horrendous. This week has experienced DJIA losses in 27 of the last 33 years with an average performance of ā0.81%. S&P 500 and NASDAQ have fared better during the week after over the same 33-year span. S&P 500ās averaged ā0.46%. NASDAQ has averaged +0.03%. 2022ās sizable gains during the week after improve historical average performance notably.
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A New Bull Market: Whatās Driving It?
The S&P 500 finally closed 20% above its October 12th (2022) closing low. This puts the index in āofficialā bull market territory.
Of course, if you had been reading or listening to Ryan on our Facts vs Feelings podcast, youād have heard him say that October 12th was the low. He actually wrote a piece titled āWhy Stocks Likely Just Bottomedā on October 19th!
The S&P 500 Index fell 25% from its peak on January 3rd, 2022 through October 12th. The subsequent 20% gain still puts it 10% below the prior peak. This does get to āmath of volatilityā. The index would need to gain 33% from its low to regain that level. This is a reason why itās always better to lose less, is because you need to gain less to get back to even.
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So, whatās next? The good news is that future returns are strong. In his latest piece, Ryan wrote that out of 13 times when stocks rose 20% off a 52-week low, 10 of those times the lows were not violated. The average return 12 months later was close to 18%. The only time we didnāt see a gain was in the 2001-2002 bear market.
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** Digging into the return drivers**
Itās interesting to look at whatās been driving returns over the past year. This can help us think about what may lie ahead. The question was prompted by our friend, Sam Roās latest piece on the bull market breakout. He wrote that earnings havenāt been as bad as expected. More importantly, prospects have actually been improving.
The chart below shows earnings expectations for the S&P 500 over the next 12 months. You can see how it rose in the first half of 2022, before collapsing over the second half of the year. The collapse continued into January of this year. But since then, earnings expectations have steadily risen. In fact, theyāve accelerated higher since mid-April, after the last earnings season started. Currently, theyāre higher than where we started the year.
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Backing up a bit: we can break apart the price return of a stock (or index) into two components:
I decomposed annual S&P 500 returns from 2020 ā 2023 (through June 8th) into these two components. The chart below shows how these added up to the total return for each year. It also includes:
- Earnings growth
- Valuation multiple growth
- The bear market pullback from January 3rd, 2022, through October 12th, 2022
- And the 20% rally from the low through June 8th, 2023
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You can see how multiple changes have dominated the swing in returns.
The notable exception is 2021, when the S&P 500 return was propelled by earnings growth. In contrast, the 2022 pullback was entirely attributed to multiple contraction. Earnings made a positive contribution in 2022.
Now, multiple contraction is not surprising given the rapid change in rates, as the Federal Reserve (Fed) looked to get on top of inflation. However, they are close to the end of rate hikes, and so thatās no longer a big drag on multiples.
Consequently, multiple growth has pulled the index higher this year. You can see how multiple contraction basically drove the pullback in the Index during the bear market, through the low. But since then, multiples have expanded, pretty much driving the 20% gain.
Hereās a more dynamic picture of the S&P 500ās cumulative price return action from January 3rd, 2022, through June 8th, 2023. The chart also shows the contribution from earnings and multiple growth. As you can see, earnings have been fairly steady, rising 4% over the entire period. However, the swing in multiples is what drove the price return volatility.
Multiples contracted by 14%, and when combined with 4% earnings growth, you experienced the index return of -10%.
What next?
As I pointed out above, the problem for stocks last year was multiple contraction, which was driven by a rapid surge in interest rates.
The good news is that weāre probably close to end of rate hikes. The Fed may go ahead with just one more rate hike (in July), which is not much within the context of the 5%-point increase in rates that they implemented over the past year.
Our view is that rates are likely to remain where they are for a while. But rates are unlikely to rise from 5% to 10%, or even 7%, unless we get another major inflation shock.
This means a major obstacle that hindered stocks last year is dissipating. The removal of this headwind is yet another positive factor for stocks as we look ahead into the second half of the year.
Why Low Volatility Isnāt Bearish
āThere is no such thing as average when it comes to the stock market or investing.ā -Ryan Detrick
You might have heard by now, but the CBOE Volatility Index (better known as the VIX) made a new 52-week low earlier this week and closed beneath 14 for the first time in more than three years. This has many in the financial media clamoring that āthe VIX is low and this is bearishā.
They have been telling us (incorrectly) that only five stocks have been going up and this was bearish, that a recession was right around the corner, that the yield curve being inverted was bearish, that M2 money supply YoY tanking was bearish, and now we have the VIX being low is bearish. Weāve disagreed with all of these worries and now we take issue with a low VIX as being bearish.
What exactly is the VIX you ask? Iād suggest reading this summary from Investopedia for a full explanation, but it is simply how much option players are willing to pay up for potential volatility over the coming 30 days. If they sense volatility, they will pay up for insurance. What you might know is that when the VIX is high (say above 30), that means the market tends to be more volatile and likely in a bearish phase. Versus a low VIX (say sub 15) historically has lead to some really nice bull markets and small amounts of volatility.
Back to your regularly scheduled blog now.
The last time the VIX went this long above 14 was for more than five years, ending in August 2012. You know what happened next that time? The S&P 500 added more than 18% the following 12 months. Yes, this is a sample size of one, but I think it shows that a VIX sub 14 by itself isnāt the end of the world.
One of the key concepts around volatility is trends can last for years. What I mean by this is for years the VIX can be high and for years it can be low. Since 1990, the average VIX was 19.7, but it rarely trades around that average. Take another look at the quote Iāve used many times above, as averages arenāt so average. This chart is one Iāve used for years now and I think we could be on the cusp of another low volatility regime. The red areas are times the VIX was consistently above 20, while the yellow were beneath 20. What you also need to know is those red periods usually took place during bear markets and very volatile markets, while the yellow periods were hallmarked by low volatility and higher equity prices. Are we about to enter a new period of lower volatility? No one of course knows, but if this is about to happen (which is my vote), it is another reason to think that higher equity prices (our base case as we remain overweight equities in our Carson House Views) will be coming.
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Lastly, Iāll leave you on this potentially bullish point. We like to use relative ratios to get a feel for how one asset is going versus to another. We always want to be in assets or sectors that are showing relative strength, while avoiding areas that are weak.
Well, stocks just broke out to new highs relative to bonds once again. After a period of consolidation during the bear market last year, now we have stocks firmly in the driver seat relative to bonds. This is another reason we remain overweight stocks currently and continue to expect stocks to do better than bonds going forward.
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Our Leading Economic Index Says the Economy is Not in a Recession
Weāve been writing since the end of last year about how we believe the economy can avoid a recession in 2023, including in our 2023 outlook. This has run contrary to most other economistsā predictions. Interestingly, the tide has been shifting recently, as weāve gotten a string of relatively stronger economic data. More so after the latest payrolls data, which surprised again.
One challenge with economic data is that we get so many of them, and a lot of times they can send conflicting signals. It can be hard to parse through all of it and come up with an updated view of the economy after every data release.
One approach is to combine these into a single indicator, i.e. a āleading economic indexā (LEI). Itās āleadingā because the idea is to give you an early warning signal about economic turning points.
Simply put, it tells you what the economy is doing today and what it is likely to do in the near future.
The most popular LEI points to recession
One of the most widely used LEIās is released by the Conference Board, and it currently points to recession. As you can see in the chart below, the Conference Boardās LEI is highly correlated with GDP growth ā the chart shows year-over-year change in both.
You can see how the index started to fall ahead of the 2001 and 2008 recession (shaded areas). The 2020 pandemic recession was an anomaly since it hit so suddenly. In any case, using an LEI means we didnāt have to wait for GDP data (which are released well after a quarter ends) to tell us whether the economy was close to, or in a recession.
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As you probably noticed above, the LEI is down 8% year-over-year, signaling a recession over the next 12 months. Itās been pointing to a recession since last fall, with the index declining for 13 straight months through April.
Quoting the Conference Board:
āThe Conference Board forecasts a contraction of economic activity starting in Q2 leading to a mild recession by mid-2023.ā
Safe to say, weāre close to mid-2023 and thereās no sign of a recession yet.
Whatās inside the LEI
The Conference Boardās LEI has 10 components of which,
You can see how these indicators have pulled the index down by 4.4% over the past 6 months, and by -0.6% in April alone.
- 3 are financial market indicators, including the S&P 500, and make up 22% of the index
- 4 measure business and manufacturing activity (44%)
- 1 measures housing activity (3%)
- 2 are related to the consumer, including the labor market (31%)
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Hereās the thing. This popular LEI is premised on the fact that the manufacturing sector, and business activity/sentiment, is a leading indicator of the economy. This worked well in the past but is probably not indicative of whatās happening in the economy right now. For one thing, the manufacturing sector makes up just about 11% of GDP.
Consumption makes up 68% of the economy, and we believe itās important to capture that.
In fact, consumption was strong in Q1 and even at the start of Q2, thanks to rising real incomes. Housing is also making a turnaround and should no longer be a drag on the economy going forward (as it has been over the past 8 quarters). The Federal Reserve (Fed) is also close to being done with rate hikes. Plus, as my colleague, Ryan Detrick pointed out, the stock marketās turned around and is close to entering a new bull market.
Obviously, there are a lot of data points that we look at and one way we parse through all of it is by constructing our own leading economic index.
An LEI that better reflects the US economy
We believe our proprietary LEI better captures the dynamics of the US economy. It was developed a decade ago and is a key input into our asset allocation decisions.
In contrast to the Conference Boardās measure, it includes 20+ components, including,
Just as an example, the consumer-related data includes unemployment benefit claims, weekly hours worked, and vehicle sales. Housing includes indicators like building permits and new home sales.
- Consumer-related indicators (make up 50% of the index)
- Housing activity (18%)
- Business and manufacturing activity (23%)
- Financial markets (9%)
The chart below shows how our LEI has moved through time ā capturing whether the economy is growing below trend, on-trend (a value close to zero), or above trend. Like the Conference Boardās measure, it is able to capture major turning points in the business cycle. It declined ahead of the actual start of the 2011 and 2008 recessions.
As of April, our index is indicating that the economy is growing right along trend.
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Last year, the index signaled that the economy was growing below trend, and that the risk of a recession was high.
Note that it didnāt point to an actual recession. Just that āriskā of one was higher than normal. In fact, our LEI held close to the lows we saw over the last decade, especially in 2011 and 2016 (after which the economy, and even the stock market, recovered).
The following chart captures a close-up view of the last 3 and half years, which includes the Covid pullback and subsequent recovery. The contribution from the 4 major categories is also shown. You can see how the consumer has remained strong over the past year ā in fact, consumer indicators have been stronger this year than in late 2022.
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The main risk of a recession last year was due to the Fed raising rates as fast as they did, which adversely impacted housing, financial markets, and business activity.
The good news is that these sectors are improving even as consumer strength continues. The improvement in housing is notable. Additionally, the drag from financial conditions is beginning to ease as we think that the Federal Reserve gets closer to the end of rate hikes, and markets rally.
Putting the Puzzle Together
Another novel part of our approach is that we have an LEI like the one for the US for more than 25 other countries. Each one is custom built to capture the dynamics of those economies. The individual country LEIs are also subsequently rolled up to a global index to give us a picture of the global economy, as shown below.
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I want to emphasize that we do not rely solely on this as the one and only input into our asset allocation, portfolio and risk management decisions. While it is an important component that encapsulates a lot of significant information, it is just one piece of the puzzle. Our process also has other pillars such as policy (both monetary and fiscal), technical factors, and valuations.
We believe itās important to put all these pieces together, kind of like putting together a puzzle, to understand whatās happening in the economy and markets, and position portfolios accordingly.
Putting together a puzzle is both a mechanistic and artistic process. The mechanistic aspect involves sorting the pieces, finding edges, and matching colors, etc. It requires a logical and methodical approach, and in our process the LEI is key to that.
However, there is an artistic element as well. As we assemble the pieces together, a larger picture gradually emerges. You can make creative decisions about how each piece fits within the overall picture. Within the context of portfolio management, that takes a diverse range of experience. Which is the core strength of our Investment Research Team.
Welcome to the New Bull Market
āIf you torture numbers enough, they will tell you anything.ā -Yogi Berra, Yankee great and Hall of Fame catcher
Donāt shoot the messenger, but historically, it is widely considered a new bull market once stocks are more than 20% off their bear market lows. This is similar to when stocks are down 20% they are in a bear market. Well, the S&P 500 is less than one percent away from this 20% threshold, so get ready to hear a lot about it when it eventually happens.
Iām not crazy about this concept, as weāve been in the camp that the bear market ended in October for months now (we started to say it in late October, getting some really odd looks I might add), meaning a new bull market has been here for a while. Take another look at the great Yogi quote above, as someone can get whatever they want probably when talking about bear and bull markets.
None the less, what exactly does a 20% move higher off a bear market low really mean? The good news is future returns are quite strong.
We found 13 times that stocks soared at least 20% off a 52-week low and 10 times the lows were indeed in and not violated. The only times it didnāt work? Twice during the tech bubble implosion and once during the Financial Crisis. In other words, some of the truly worst times to be invested in stocks. But the other 10 times, once there was a 20% gain, the lows were in and in most cases, higher prices were soon coming. This chart does a nice job of showing this concept, with the red dots the times new lows were still yet to come after a 20% bounce.
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Hereās a table with all the breakdowns. A year later stocks were down only once and that was during the 2001/2002 bear market, with the average gain a year after a 20% bounce at a very impressive 17.7%. It is worth noting that the one- and three-month returns arenāt anything special, probably because some type of consolidation would be expected after surges higher, but six months and a year later are quite strong.
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As weāve been saying this full year, we continue to expect stocks to do well this year and the upward move is firmly in place and studies like this do little to change our opinion.
($ADBE $ORCL $KR $ACB $ATEX $ITI $LEN $MPAA $JBL $ECX $POWW $HITI $MMMB $CGNT $WLY $RFIL)
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2023.06.09 23:31 bigbear0083 Wall Street Week Ahead for the trading week beginning June 12th, 2023
The S&P 500 rose slightly Friday, touching the 4,300 level for the first time since August 2022 as investors looked ahead to upcoming inflation data and the Federal Reserveās latest policy announcement.
The broad-market index gained 0.11%, closing at 4,298.86. The Nasdaq Composite rose 0.16% to end at 13,259.14. The Dow Jones Industrial Average traded up 43.17 points, or 0.13%, closing at 33,876.78. It was the 30-stock Dowās fourth consecutive positive day.
For the week, the S&P 500 was up 0.39%. This was the broad-market indexās fourth straight winning week ā a feat it last accomplished in August. The Nasdaq was up about 0.14%, posting its seventh straight winning week ā its first streak of that length since November 2019. The Dow advanced 0.34%.
Investors were encouraged by signs that a broader swath of stocks, including small-cap equities, was participating in the recent rally. The Russell 2000 was down slightly on the day, but notched a weekly gain of 1.9%.
āItās the first time in a while where investors seem to be feeling a greater sense of certainty. And we think thatās been a turning point from what had been more of a bearish cautious sentiment,ā said Greg Bassuk, CEO at AXS Investments.
āWe think that as we walk through these next few weeks, that will be increasingly clear that the economy is more resilient than folks have given it credit for the last six months,ā said Scott Ladner, chief investment officer at Horizon Investments. āThat will sort of dawn on people that small-caps and cyclicals probably have a reasonable shot to play catch up.ā
The market is also looking toward next weekās consumer price index numbers and the Federal Open Market Committee meeting. Markets are currently anticipating a more than 71% probability the central bank will pause on rate hikes at the June meeting, according to the CME FedWatch Tool.
Juneās Quad Witching Options Expiration Riddled With Volatility
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The second Triple Witching Week (Quadruple Witching if you prefer) of the year brings on some volatile trading with losses frequently exceeding gains. NASDAQ has the weakest record on the first trading day of the week. Triple-Witching Friday is usually better, S&P 500 has been up 12 of the last 20 years, but down 6 of the last 8.
Full-week performance is choppy as well, littered with greater than 1% moves in both directions. The week after Juneās Triple-Witching Day is horrendous. This week has experienced DJIA losses in 27 of the last 33 years with an average performance of ā0.81%. S&P 500 and NASDAQ have fared better during the week after over the same 33-year span. S&P 500ās averaged ā0.46%. NASDAQ has averaged +0.03%. 2022ās sizable gains during the week after improve historical average performance notably.
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A New Bull Market: Whatās Driving It?
The S&P 500 finally closed 20% above its October 12th (2022) closing low. This puts the index in āofficialā bull market territory.
Of course, if you had been reading or listening to Ryan on our Facts vs Feelings podcast, youād have heard him say that October 12th was the low. He actually wrote a piece titled āWhy Stocks Likely Just Bottomedā on October 19th!
The S&P 500 Index fell 25% from its peak on January 3rd, 2022 through October 12th. The subsequent 20% gain still puts it 10% below the prior peak. This does get to āmath of volatilityā. The index would need to gain 33% from its low to regain that level. This is a reason why itās always better to lose less, is because you need to gain less to get back to even.
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So, whatās next? The good news is that future returns are strong. In his latest piece, Ryan wrote that out of 13 times when stocks rose 20% off a 52-week low, 10 of those times the lows were not violated. The average return 12 months later was close to 18%. The only time we didnāt see a gain was in the 2001-2002 bear market.
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** Digging into the return drivers**
Itās interesting to look at whatās been driving returns over the past year. This can help us think about what may lie ahead. The question was prompted by our friend, Sam Roās latest piece on the bull market breakout. He wrote that earnings havenāt been as bad as expected. More importantly, prospects have actually been improving.
The chart below shows earnings expectations for the S&P 500 over the next 12 months. You can see how it rose in the first half of 2022, before collapsing over the second half of the year. The collapse continued into January of this year. But since then, earnings expectations have steadily risen. In fact, theyāve accelerated higher since mid-April, after the last earnings season started. Currently, theyāre higher than where we started the year.
(CLICK HERE FOR THE CHART!)
Backing up a bit: we can break apart the price return of a stock (or index) into two components:
I decomposed annual S&P 500 returns from 2020 ā 2023 (through June 8th) into these two components. The chart below shows how these added up to the total return for each year. It also includes:
- Earnings growth
- Valuation multiple growth
- The bear market pullback from January 3rd, 2022, through October 12th, 2022
- And the 20% rally from the low through June 8th, 2023
(CLICK HERE FOR THE CHART!)
You can see how multiple changes have dominated the swing in returns.
The notable exception is 2021, when the S&P 500 return was propelled by earnings growth. In contrast, the 2022 pullback was entirely attributed to multiple contraction. Earnings made a positive contribution in 2022.
Now, multiple contraction is not surprising given the rapid change in rates, as the Federal Reserve (Fed) looked to get on top of inflation. However, they are close to the end of rate hikes, and so thatās no longer a big drag on multiples.
Consequently, multiple growth has pulled the index higher this year. You can see how multiple contraction basically drove the pullback in the Index during the bear market, through the low. But since then, multiples have expanded, pretty much driving the 20% gain.
Hereās a more dynamic picture of the S&P 500ās cumulative price return action from January 3rd, 2022, through June 8th, 2023. The chart also shows the contribution from earnings and multiple growth. As you can see, earnings have been fairly steady, rising 4% over the entire period. However, the swing in multiples is what drove the price return volatility.
Multiples contracted by 14%, and when combined with 4% earnings growth, you experienced the index return of -10%.
What next?
As I pointed out above, the problem for stocks last year was multiple contraction, which was driven by a rapid surge in interest rates.
The good news is that weāre probably close to end of rate hikes. The Fed may go ahead with just one more rate hike (in July), which is not much within the context of the 5%-point increase in rates that they implemented over the past year.
Our view is that rates are likely to remain where they are for a while. But rates are unlikely to rise from 5% to 10%, or even 7%, unless we get another major inflation shock.
This means a major obstacle that hindered stocks last year is dissipating. The removal of this headwind is yet another positive factor for stocks as we look ahead into the second half of the year.
Why Low Volatility Isnāt Bearish
āThere is no such thing as average when it comes to the stock market or investing.ā -Ryan Detrick
You might have heard by now, but the CBOE Volatility Index (better known as the VIX) made a new 52-week low earlier this week and closed beneath 14 for the first time in more than three years. This has many in the financial media clamoring that āthe VIX is low and this is bearishā.
They have been telling us (incorrectly) that only five stocks have been going up and this was bearish, that a recession was right around the corner, that the yield curve being inverted was bearish, that M2 money supply YoY tanking was bearish, and now we have the VIX being low is bearish. Weāve disagreed with all of these worries and now we take issue with a low VIX as being bearish.
What exactly is the VIX you ask? Iād suggest reading this summary from Investopedia for a full explanation, but it is simply how much option players are willing to pay up for potential volatility over the coming 30 days. If they sense volatility, they will pay up for insurance. What you might know is that when the VIX is high (say above 30), that means the market tends to be more volatile and likely in a bearish phase. Versus a low VIX (say sub 15) historically has lead to some really nice bull markets and small amounts of volatility.
Back to your regularly scheduled blog now.
The last time the VIX went this long above 14 was for more than five years, ending in August 2012. You know what happened next that time? The S&P 500 added more than 18% the following 12 months. Yes, this is a sample size of one, but I think it shows that a VIX sub 14 by itself isnāt the end of the world.
One of the key concepts around volatility is trends can last for years. What I mean by this is for years the VIX can be high and for years it can be low. Since 1990, the average VIX was 19.7, but it rarely trades around that average. Take another look at the quote Iāve used many times above, as averages arenāt so average. This chart is one Iāve used for years now and I think we could be on the cusp of another low volatility regime. The red areas are times the VIX was consistently above 20, while the yellow were beneath 20. What you also need to know is those red periods usually took place during bear markets and very volatile markets, while the yellow periods were hallmarked by low volatility and higher equity prices. Are we about to enter a new period of lower volatility? No one of course knows, but if this is about to happen (which is my vote), it is another reason to think that higher equity prices (our base case as we remain overweight equities in our Carson House Views) will be coming.
(CLICK HERE FOR THE CHART!)
Lastly, Iāll leave you on this potentially bullish point. We like to use relative ratios to get a feel for how one asset is going versus to another. We always want to be in assets or sectors that are showing relative strength, while avoiding areas that are weak.
Well, stocks just broke out to new highs relative to bonds once again. After a period of consolidation during the bear market last year, now we have stocks firmly in the driver seat relative to bonds. This is another reason we remain overweight stocks currently and continue to expect stocks to do better than bonds going forward.
(CLICK HERE FOR THE CHART!)
Our Leading Economic Index Says the Economy is Not in a Recession
Weāve been writing since the end of last year about how we believe the economy can avoid a recession in 2023, including in our 2023 outlook. This has run contrary to most other economistsā predictions. Interestingly, the tide has been shifting recently, as weāve gotten a string of relatively stronger economic data. More so after the latest payrolls data, which surprised again.
One challenge with economic data is that we get so many of them, and a lot of times they can send conflicting signals. It can be hard to parse through all of it and come up with an updated view of the economy after every data release.
One approach is to combine these into a single indicator, i.e. a āleading economic indexā (LEI). Itās āleadingā because the idea is to give you an early warning signal about economic turning points.
Simply put, it tells you what the economy is doing today and what it is likely to do in the near future.
The most popular LEI points to recession
One of the most widely used LEIās is released by the Conference Board, and it currently points to recession. As you can see in the chart below, the Conference Boardās LEI is highly correlated with GDP growth ā the chart shows year-over-year change in both.
You can see how the index started to fall ahead of the 2001 and 2008 recession (shaded areas). The 2020 pandemic recession was an anomaly since it hit so suddenly. In any case, using an LEI means we didnāt have to wait for GDP data (which are released well after a quarter ends) to tell us whether the economy was close to, or in a recession.
(CLICK HERE FOR THE CHART!)
As you probably noticed above, the LEI is down 8% year-over-year, signaling a recession over the next 12 months. Itās been pointing to a recession since last fall, with the index declining for 13 straight months through April.
Quoting the Conference Board:
āThe Conference Board forecasts a contraction of economic activity starting in Q2 leading to a mild recession by mid-2023.ā
Safe to say, weāre close to mid-2023 and thereās no sign of a recession yet.
Whatās inside the LEI
The Conference Boardās LEI has 10 components of which,
You can see how these indicators have pulled the index down by 4.4% over the past 6 months, and by -0.6% in April alone.
- 3 are financial market indicators, including the S&P 500, and make up 22% of the index
- 4 measure business and manufacturing activity (44%)
- 1 measures housing activity (3%)
- 2 are related to the consumer, including the labor market (31%)
(CLICK HERE FOR THE CHART!)
Hereās the thing. This popular LEI is premised on the fact that the manufacturing sector, and business activity/sentiment, is a leading indicator of the economy. This worked well in the past but is probably not indicative of whatās happening in the economy right now. For one thing, the manufacturing sector makes up just about 11% of GDP.
Consumption makes up 68% of the economy, and we believe itās important to capture that.
In fact, consumption was strong in Q1 and even at the start of Q2, thanks to rising real incomes. Housing is also making a turnaround and should no longer be a drag on the economy going forward (as it has been over the past 8 quarters). The Federal Reserve (Fed) is also close to being done with rate hikes. Plus, as my colleague, Ryan Detrick pointed out, the stock marketās turned around and is close to entering a new bull market.
Obviously, there are a lot of data points that we look at and one way we parse through all of it is by constructing our own leading economic index.
An LEI that better reflects the US economy
We believe our proprietary LEI better captures the dynamics of the US economy. It was developed a decade ago and is a key input into our asset allocation decisions.
In contrast to the Conference Boardās measure, it includes 20+ components, including,
Just as an example, the consumer-related data includes unemployment benefit claims, weekly hours worked, and vehicle sales. Housing includes indicators like building permits and new home sales.
- Consumer-related indicators (make up 50% of the index)
- Housing activity (18%)
- Business and manufacturing activity (23%)
- Financial markets (9%)
The chart below shows how our LEI has moved through time ā capturing whether the economy is growing below trend, on-trend (a value close to zero), or above trend. Like the Conference Boardās measure, it is able to capture major turning points in the business cycle. It declined ahead of the actual start of the 2011 and 2008 recessions.
As of April, our index is indicating that the economy is growing right along trend.
(CLICK HERE FOR THE CHART!)
Last year, the index signaled that the economy was growing below trend, and that the risk of a recession was high.
Note that it didnāt point to an actual recession. Just that āriskā of one was higher than normal. In fact, our LEI held close to the lows we saw over the last decade, especially in 2011 and 2016 (after which the economy, and even the stock market, recovered).
The following chart captures a close-up view of the last 3 and half years, which includes the Covid pullback and subsequent recovery. The contribution from the 4 major categories is also shown. You can see how the consumer has remained strong over the past year ā in fact, consumer indicators have been stronger this year than in late 2022.
(CLICK HERE FOR THE CHART!)
The main risk of a recession last year was due to the Fed raising rates as fast as they did, which adversely impacted housing, financial markets, and business activity.
The good news is that these sectors are improving even as consumer strength continues. The improvement in housing is notable. Additionally, the drag from financial conditions is beginning to ease as we think that the Federal Reserve gets closer to the end of rate hikes, and markets rally.
Putting the Puzzle Together
Another novel part of our approach is that we have an LEI like the one for the US for more than 25 other countries. Each one is custom built to capture the dynamics of those economies. The individual country LEIs are also subsequently rolled up to a global index to give us a picture of the global economy, as shown below.
(CLICK HERE FOR THE CHART!)
I want to emphasize that we do not rely solely on this as the one and only input into our asset allocation, portfolio and risk management decisions. While it is an important component that encapsulates a lot of significant information, it is just one piece of the puzzle. Our process also has other pillars such as policy (both monetary and fiscal), technical factors, and valuations.
We believe itās important to put all these pieces together, kind of like putting together a puzzle, to understand whatās happening in the economy and markets, and position portfolios accordingly.
Putting together a puzzle is both a mechanistic and artistic process. The mechanistic aspect involves sorting the pieces, finding edges, and matching colors, etc. It requires a logical and methodical approach, and in our process the LEI is key to that.
However, there is an artistic element as well. As we assemble the pieces together, a larger picture gradually emerges. You can make creative decisions about how each piece fits within the overall picture. Within the context of portfolio management, that takes a diverse range of experience. Which is the core strength of our Investment Research Team.
Welcome to the New Bull Market
āIf you torture numbers enough, they will tell you anything.ā -Yogi Berra, Yankee great and Hall of Fame catcher
Donāt shoot the messenger, but historically, it is widely considered a new bull market once stocks are more than 20% off their bear market lows. This is similar to when stocks are down 20% they are in a bear market. Well, the S&P 500 is less than one percent away from this 20% threshold, so get ready to hear a lot about it when it eventually happens.
Iām not crazy about this concept, as weāve been in the camp that the bear market ended in October for months now (we started to say it in late October, getting some really odd looks I might add), meaning a new bull market has been here for a while. Take another look at the great Yogi quote above, as someone can get whatever they want probably when talking about bear and bull markets.
None the less, what exactly does a 20% move higher off a bear market low really mean? The good news is future returns are quite strong.
We found 13 times that stocks soared at least 20% off a 52-week low and 10 times the lows were indeed in and not violated. The only times it didnāt work? Twice during the tech bubble implosion and once during the Financial Crisis. In other words, some of the truly worst times to be invested in stocks. But the other 10 times, once there was a 20% gain, the lows were in and in most cases, higher prices were soon coming. This chart does a nice job of showing this concept, with the red dots the times new lows were still yet to come after a 20% bounce.
(CLICK HERE FOR THE CHART!)
Hereās a table with all the breakdowns. A year later stocks were down only once and that was during the 2001/2002 bear market, with the average gain a year after a 20% bounce at a very impressive 17.7%. It is worth noting that the one- and three-month returns arenāt anything special, probably because some type of consolidation would be expected after surges higher, but six months and a year later are quite strong.
(CLICK HERE FOR THE CHART!)
As weāve been saying this full year, we continue to expect stocks to do well this year and the upward move is firmly in place and studies like this do little to change our opinion.
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(T.B.A. THIS WEEKEND.)
(T.B.A. THIS WEEKEND.) (T.B.A. THIS WEEKEND.).
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2023.06.09 23:30 bigbear0083 Wall Street Week Ahead for the trading week beginning June 12th, 2023
The S&P 500 rose slightly Friday, touching the 4,300 level for the first time since August 2022 as investors looked ahead to upcoming inflation data and the Federal Reserveās latest policy announcement.
The broad-market index gained 0.11%, closing at 4,298.86. The Nasdaq Composite rose 0.16% to end at 13,259.14. The Dow Jones Industrial Average traded up 43.17 points, or 0.13%, closing at 33,876.78. It was the 30-stock Dowās fourth consecutive positive day.
For the week, the S&P 500 was up 0.39%. This was the broad-market indexās fourth straight winning week ā a feat it last accomplished in August. The Nasdaq was up about 0.14%, posting its seventh straight winning week ā its first streak of that length since November 2019. The Dow advanced 0.34%.
Investors were encouraged by signs that a broader swath of stocks, including small-cap equities, was participating in the recent rally. The Russell 2000 was down slightly on the day, but notched a weekly gain of 1.9%.
āItās the first time in a while where investors seem to be feeling a greater sense of certainty. And we think thatās been a turning point from what had been more of a bearish cautious sentiment,ā said Greg Bassuk, CEO at AXS Investments.
āWe think that as we walk through these next few weeks, that will be increasingly clear that the economy is more resilient than folks have given it credit for the last six months,ā said Scott Ladner, chief investment officer at Horizon Investments. āThat will sort of dawn on people that small-caps and cyclicals probably have a reasonable shot to play catch up.ā
The market is also looking toward next weekās consumer price index numbers and the Federal Open Market Committee meeting. Markets are currently anticipating a more than 71% probability the central bank will pause on rate hikes at the June meeting, according to the CME FedWatch Tool.
Juneās Quad Witching Options Expiration Riddled With Volatility
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The second Triple Witching Week (Quadruple Witching if you prefer) of the year brings on some volatile trading with losses frequently exceeding gains. NASDAQ has the weakest record on the first trading day of the week. Triple-Witching Friday is usually better, S&P 500 has been up 12 of the last 20 years, but down 6 of the last 8.
Full-week performance is choppy as well, littered with greater than 1% moves in both directions. The week after Juneās Triple-Witching Day is horrendous. This week has experienced DJIA losses in 27 of the last 33 years with an average performance of ā0.81%. S&P 500 and NASDAQ have fared better during the week after over the same 33-year span. S&P 500ās averaged ā0.46%. NASDAQ has averaged +0.03%. 2022ās sizable gains during the week after improve historical average performance notably.
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A New Bull Market: Whatās Driving It?
The S&P 500 finally closed 20% above its October 12th (2022) closing low. This puts the index in āofficialā bull market territory.
Of course, if you had been reading or listening to Ryan on our Facts vs Feelings podcast, youād have heard him say that October 12th was the low. He actually wrote a piece titled āWhy Stocks Likely Just Bottomedā on October 19th!
The S&P 500 Index fell 25% from its peak on January 3rd, 2022 through October 12th. The subsequent 20% gain still puts it 10% below the prior peak. This does get to āmath of volatilityā. The index would need to gain 33% from its low to regain that level. This is a reason why itās always better to lose less, is because you need to gain less to get back to even.
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So, whatās next? The good news is that future returns are strong. In his latest piece, Ryan wrote that out of 13 times when stocks rose 20% off a 52-week low, 10 of those times the lows were not violated. The average return 12 months later was close to 18%. The only time we didnāt see a gain was in the 2001-2002 bear market.
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** Digging into the return drivers**
Itās interesting to look at whatās been driving returns over the past year. This can help us think about what may lie ahead. The question was prompted by our friend, Sam Roās latest piece on the bull market breakout. He wrote that earnings havenāt been as bad as expected. More importantly, prospects have actually been improving.
The chart below shows earnings expectations for the S&P 500 over the next 12 months. You can see how it rose in the first half of 2022, before collapsing over the second half of the year. The collapse continued into January of this year. But since then, earnings expectations have steadily risen. In fact, theyāve accelerated higher since mid-April, after the last earnings season started. Currently, theyāre higher than where we started the year.
(CLICK HERE FOR THE CHART!)
Backing up a bit: we can break apart the price return of a stock (or index) into two components:
I decomposed annual S&P 500 returns from 2020 ā 2023 (through June 8th) into these two components. The chart below shows how these added up to the total return for each year. It also includes:
- Earnings growth
- Valuation multiple growth
- The bear market pullback from January 3rd, 2022, through October 12th, 2022
- And the 20% rally from the low through June 8th, 2023
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You can see how multiple changes have dominated the swing in returns.
The notable exception is 2021, when the S&P 500 return was propelled by earnings growth. In contrast, the 2022 pullback was entirely attributed to multiple contraction. Earnings made a positive contribution in 2022.
Now, multiple contraction is not surprising given the rapid change in rates, as the Federal Reserve (Fed) looked to get on top of inflation. However, they are close to the end of rate hikes, and so thatās no longer a big drag on multiples.
Consequently, multiple growth has pulled the index higher this year. You can see how multiple contraction basically drove the pullback in the Index during the bear market, through the low. But since then, multiples have expanded, pretty much driving the 20% gain.
Hereās a more dynamic picture of the S&P 500ās cumulative price return action from January 3rd, 2022, through June 8th, 2023. The chart also shows the contribution from earnings and multiple growth. As you can see, earnings have been fairly steady, rising 4% over the entire period. However, the swing in multiples is what drove the price return volatility.
Multiples contracted by 14%, and when combined with 4% earnings growth, you experienced the index return of -10%.
What next?
As I pointed out above, the problem for stocks last year was multiple contraction, which was driven by a rapid surge in interest rates.
The good news is that weāre probably close to end of rate hikes. The Fed may go ahead with just one more rate hike (in July), which is not much within the context of the 5%-point increase in rates that they implemented over the past year.
Our view is that rates are likely to remain where they are for a while. But rates are unlikely to rise from 5% to 10%, or even 7%, unless we get another major inflation shock.
This means a major obstacle that hindered stocks last year is dissipating. The removal of this headwind is yet another positive factor for stocks as we look ahead into the second half of the year.
Why Low Volatility Isnāt Bearish
āThere is no such thing as average when it comes to the stock market or investing.ā -Ryan Detrick
You might have heard by now, but the CBOE Volatility Index (better known as the VIX) made a new 52-week low earlier this week and closed beneath 14 for the first time in more than three years. This has many in the financial media clamoring that āthe VIX is low and this is bearishā.
They have been telling us (incorrectly) that only five stocks have been going up and this was bearish, that a recession was right around the corner, that the yield curve being inverted was bearish, that M2 money supply YoY tanking was bearish, and now we have the VIX being low is bearish. Weāve disagreed with all of these worries and now we take issue with a low VIX as being bearish.
What exactly is the VIX you ask? Iād suggest reading this summary from Investopedia for a full explanation, but it is simply how much option players are willing to pay up for potential volatility over the coming 30 days. If they sense volatility, they will pay up for insurance. What you might know is that when the VIX is high (say above 30), that means the market tends to be more volatile and likely in a bearish phase. Versus a low VIX (say sub 15) historically has lead to some really nice bull markets and small amounts of volatility.
Back to your regularly scheduled blog now.
The last time the VIX went this long above 14 was for more than five years, ending in August 2012. You know what happened next that time? The S&P 500 added more than 18% the following 12 months. Yes, this is a sample size of one, but I think it shows that a VIX sub 14 by itself isnāt the end of the world.
One of the key concepts around volatility is trends can last for years. What I mean by this is for years the VIX can be high and for years it can be low. Since 1990, the average VIX was 19.7, but it rarely trades around that average. Take another look at the quote Iāve used many times above, as averages arenāt so average. This chart is one Iāve used for years now and I think we could be on the cusp of another low volatility regime. The red areas are times the VIX was consistently above 20, while the yellow were beneath 20. What you also need to know is those red periods usually took place during bear markets and very volatile markets, while the yellow periods were hallmarked by low volatility and higher equity prices. Are we about to enter a new period of lower volatility? No one of course knows, but if this is about to happen (which is my vote), it is another reason to think that higher equity prices (our base case as we remain overweight equities in our Carson House Views) will be coming.
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Lastly, Iāll leave you on this potentially bullish point. We like to use relative ratios to get a feel for how one asset is going versus to another. We always want to be in assets or sectors that are showing relative strength, while avoiding areas that are weak.
Well, stocks just broke out to new highs relative to bonds once again. After a period of consolidation during the bear market last year, now we have stocks firmly in the driver seat relative to bonds. This is another reason we remain overweight stocks currently and continue to expect stocks to do better than bonds going forward.
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Our Leading Economic Index Says the Economy is Not in a Recession
Weāve been writing since the end of last year about how we believe the economy can avoid a recession in 2023, including in our 2023 outlook. This has run contrary to most other economistsā predictions. Interestingly, the tide has been shifting recently, as weāve gotten a string of relatively stronger economic data. More so after the latest payrolls data, which surprised again.
One challenge with economic data is that we get so many of them, and a lot of times they can send conflicting signals. It can be hard to parse through all of it and come up with an updated view of the economy after every data release.
One approach is to combine these into a single indicator, i.e. a āleading economic indexā (LEI). Itās āleadingā because the idea is to give you an early warning signal about economic turning points.
Simply put, it tells you what the economy is doing today and what it is likely to do in the near future.
The most popular LEI points to recession
One of the most widely used LEIās is released by the Conference Board, and it currently points to recession. As you can see in the chart below, the Conference Boardās LEI is highly correlated with GDP growth ā the chart shows year-over-year change in both.
You can see how the index started to fall ahead of the 2001 and 2008 recession (shaded areas). The 2020 pandemic recession was an anomaly since it hit so suddenly. In any case, using an LEI means we didnāt have to wait for GDP data (which are released well after a quarter ends) to tell us whether the economy was close to, or in a recession.
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As you probably noticed above, the LEI is down 8% year-over-year, signaling a recession over the next 12 months. Itās been pointing to a recession since last fall, with the index declining for 13 straight months through April.
Quoting the Conference Board:
āThe Conference Board forecasts a contraction of economic activity starting in Q2 leading to a mild recession by mid-2023.ā
Safe to say, weāre close to mid-2023 and thereās no sign of a recession yet.
Whatās inside the LEI
The Conference Boardās LEI has 10 components of which,
You can see how these indicators have pulled the index down by 4.4% over the past 6 months, and by -0.6% in April alone.
- 3 are financial market indicators, including the S&P 500, and make up 22% of the index
- 4 measure business and manufacturing activity (44%)
- 1 measures housing activity (3%)
- 2 are related to the consumer, including the labor market (31%)
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Hereās the thing. This popular LEI is premised on the fact that the manufacturing sector, and business activity/sentiment, is a leading indicator of the economy. This worked well in the past but is probably not indicative of whatās happening in the economy right now. For one thing, the manufacturing sector makes up just about 11% of GDP.
Consumption makes up 68% of the economy, and we believe itās important to capture that.
In fact, consumption was strong in Q1 and even at the start of Q2, thanks to rising real incomes. Housing is also making a turnaround and should no longer be a drag on the economy going forward (as it has been over the past 8 quarters). The Federal Reserve (Fed) is also close to being done with rate hikes. Plus, as my colleague, Ryan Detrick pointed out, the stock marketās turned around and is close to entering a new bull market.
Obviously, there are a lot of data points that we look at and one way we parse through all of it is by constructing our own leading economic index.
An LEI that better reflects the US economy
We believe our proprietary LEI better captures the dynamics of the US economy. It was developed a decade ago and is a key input into our asset allocation decisions.
In contrast to the Conference Boardās measure, it includes 20+ components, including,
Just as an example, the consumer-related data includes unemployment benefit claims, weekly hours worked, and vehicle sales. Housing includes indicators like building permits and new home sales.
- Consumer-related indicators (make up 50% of the index)
- Housing activity (18%)
- Business and manufacturing activity (23%)
- Financial markets (9%)
The chart below shows how our LEI has moved through time ā capturing whether the economy is growing below trend, on-trend (a value close to zero), or above trend. Like the Conference Boardās measure, it is able to capture major turning points in the business cycle. It declined ahead of the actual start of the 2011 and 2008 recessions.
As of April, our index is indicating that the economy is growing right along trend.
(CLICK HERE FOR THE CHART!)
Last year, the index signaled that the economy was growing below trend, and that the risk of a recession was high.
Note that it didnāt point to an actual recession. Just that āriskā of one was higher than normal. In fact, our LEI held close to the lows we saw over the last decade, especially in 2011 and 2016 (after which the economy, and even the stock market, recovered).
The following chart captures a close-up view of the last 3 and half years, which includes the Covid pullback and subsequent recovery. The contribution from the 4 major categories is also shown. You can see how the consumer has remained strong over the past year ā in fact, consumer indicators have been stronger this year than in late 2022.
(CLICK HERE FOR THE CHART!)
The main risk of a recession last year was due to the Fed raising rates as fast as they did, which adversely impacted housing, financial markets, and business activity.
The good news is that these sectors are improving even as consumer strength continues. The improvement in housing is notable. Additionally, the drag from financial conditions is beginning to ease as we think that the Federal Reserve gets closer to the end of rate hikes, and markets rally.
Putting the Puzzle Together
Another novel part of our approach is that we have an LEI like the one for the US for more than 25 other countries. Each one is custom built to capture the dynamics of those economies. The individual country LEIs are also subsequently rolled up to a global index to give us a picture of the global economy, as shown below.
(CLICK HERE FOR THE CHART!)
I want to emphasize that we do not rely solely on this as the one and only input into our asset allocation, portfolio and risk management decisions. While it is an important component that encapsulates a lot of significant information, it is just one piece of the puzzle. Our process also has other pillars such as policy (both monetary and fiscal), technical factors, and valuations.
We believe itās important to put all these pieces together, kind of like putting together a puzzle, to understand whatās happening in the economy and markets, and position portfolios accordingly.
Putting together a puzzle is both a mechanistic and artistic process. The mechanistic aspect involves sorting the pieces, finding edges, and matching colors, etc. It requires a logical and methodical approach, and in our process the LEI is key to that.
However, there is an artistic element as well. As we assemble the pieces together, a larger picture gradually emerges. You can make creative decisions about how each piece fits within the overall picture. Within the context of portfolio management, that takes a diverse range of experience. Which is the core strength of our Investment Research Team.
Welcome to the New Bull Market
āIf you torture numbers enough, they will tell you anything.ā -Yogi Berra, Yankee great and Hall of Fame catcher
Donāt shoot the messenger, but historically, it is widely considered a new bull market once stocks are more than 20% off their bear market lows. This is similar to when stocks are down 20% they are in a bear market. Well, the S&P 500 is less than one percent away from this 20% threshold, so get ready to hear a lot about it when it eventually happens.
Iām not crazy about this concept, as weāve been in the camp that the bear market ended in October for months now (we started to say it in late October, getting some really odd looks I might add), meaning a new bull market has been here for a while. Take another look at the great Yogi quote above, as someone can get whatever they want probably when talking about bear and bull markets.
None the less, what exactly does a 20% move higher off a bear market low really mean? The good news is future returns are quite strong.
We found 13 times that stocks soared at least 20% off a 52-week low and 10 times the lows were indeed in and not violated. The only times it didnāt work? Twice during the tech bubble implosion and once during the Financial Crisis. In other words, some of the truly worst times to be invested in stocks. But the other 10 times, once there was a 20% gain, the lows were in and in most cases, higher prices were soon coming. This chart does a nice job of showing this concept, with the red dots the times new lows were still yet to come after a 20% bounce.
(CLICK HERE FOR THE CHART!)
Hereās a table with all the breakdowns. A year later stocks were down only once and that was during the 2001/2002 bear market, with the average gain a year after a 20% bounce at a very impressive 17.7%. It is worth noting that the one- and three-month returns arenāt anything special, probably because some type of consolidation would be expected after surges higher, but six months and a year later are quite strong.
(CLICK HERE FOR THE CHART!)
As weāve been saying this full year, we continue to expect stocks to do well this year and the upward move is firmly in place and studies like this do little to change our opinion.
($ADBE $ORCL $KR $ACB $ATEX $ITI $LEN $MPAA $JBL $ECX $POWW $HITI $MMMB $CGNT $WLY $RFIL)
(CLICK HERE FOR NEXT WEEK'S MOST NOTABLE EARNINGS RELEASES!)
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(T.B.A. THIS WEEKEND.)
(T.B.A. THIS WEEKEND.) (T.B.A. THIS WEEKEND.).
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