January 10, 2025
Markets:
Stock futures tumbled after a much hotter-than-expected jobs report sent yields spiking as it likely means the Federal Reserve will halt its rate-cutting campaign.
Wall Street soured on the latest nonfarm payrolls reading, which showed job growth came out much stronger than anticipated. U.S. payrolls grew by 256,000 in December, while economists polled by Dow Jones expect to see an increase of 155,000. The unemployment rate, which was projected to remain at 4.2%, fell to 4.1% during the month.
The market does not expect a rate cut from the central bank at its next meeting later this month, with fed funds futures trading data pricing in only about a 7% chance of a quarter-point cut, according to the CME FedWatch tool.
Earlier this week, the Institute for Supply Management’s services index showed an acceleration in growth in the U.S. services industry in December as well as a rise in prices, which intensified concerns about stickier inflation. Further, private sector companies added fewer jobs than expected last month, according to payroll service provider ADP.
Portfolio:
Good morning. Wild swings so far in premarket. The good news. Economy is still strong. The bad news. Too strong for Powell and the Feds. Looks like market will gap down today about 1% or so. But could this be capitulation? We're very key trend lines, I'll lay it out for you.
SPY above 580, good chance of a rebound. Below 580 and we could test the Powell Low again 577. 576 gap fill can finally complete.
QQQ stay above 505, chance of some rebound, below that 500 will likely get tested.
Keep an eye on the VIX as well.
Very simple and straight forward.
Do not chase the day to day move, Your greatest opportunity will be driven from this exact price action. The overall trend is all that matters.
We are light in positions, TSLL & INDI, and ready to attack when we see the tick to either side. We have our breakdown line and we have our upside line stated below. We move in on break and hold. Be ready and stay patient.