December 7, 2022

Markets:

Stock futures slid Wednesday, with traders fretting over the possibility of a recession as the Federal Reserve could raise rates for longer than expected.

Wall Street is coming off another tough session, with the Dow falling more than 350 points, or 1.03%. The S&P 500 and Nasdaq Composite lost 1.4% and 2%, respectively.

Investors have been losing hope that the Fed will be able to engineer a so-called soft landing that successfully tamps down inflation through higher rates and also avoids a recession. Instead, concerns are swirling around the state of the economy and the likelihood of a downturn in 2023.

Investors await more economic data this week for clues on what to expect from the Fed. Mortgage loan application data showed a decline last week despite a fall in rates.

Stock futures fell overnight despite investors getting what they’ve been hoping for in the form of China easing Covid measures. That’s because some poor China trade data raised fears about a global recession.

China’s dollar-denominated exports fell 8.7% last month on an annual basis, much more than the 3.5% decline economists were expecting in a Reuters survey. Imports in U.S.-dollar terms declined 10.6% for the month compared to a year ago, also much more than expected.

Portfolio:

We enter the new trading session holding positions in RUN, CWH, and M.  Queue is super active this morning and we continue to monitor the trend lines we identified previously for you. We currently are under 3950, one key level. Next level to watch is 3900. We break and close below 3900 and we could have a waterfall type of event short term. However, right now, this can go either way technically. Do not count out a end of year rally, be mindful of that and what is least expected. 3900 is key now for the bears. Monster line. We patiently wait for this to materialize technically. Those that remain patient can be rewarded nicely by just watching these key levels. One other keynote; TLT is once again rallying rather than breaking down. Tells us, short term rally could be coming or at least some of the bigger funds /hedgefunds are positioning themselves for one.

Be ready today for further updates and a potential new trade alert. Let's have a great session.