Weekly Raid #50 - UAW Woes
Good Morning and Happy Monday Traders.
We have made it, the last week of September is finally upon us.
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News of the day
Now onto the news of the day.
There isn’t much to go off of today for news. There is the Dallas Fed Manufacturing index this morning. Much like all the other Manufacturing news breaks, we are looking for a miss.
On top of that we have Fed Khaskari speaking this afternoon (yay). But that’s well after the market closes so its really just something to keep an eye on for context tomorrow.
The UAW strike is poised to really impact the economy if they aren’t careful. The Strike has some broader themes that we need to keep an eye out for, the first being that if the Big 3 cave completely then it will continue to spur on other unions to strike.
Now to be clear, I support everyone’s right to a living wage, I just think that asking for a 30+% jump in one shot is a little tough to swallow, especially after watching what happened with Yellow this summer.
My thoughts are irrelevant in this situation though, what is relanvent is that the UAW has its tentacles insides many facets of the car production line. Obviously the factories in Motor City, but they are also in fabrication, chip manufacturing, paint, and cyclical for upholstery and other interior car items. A prolonged strike could have some serious implications for the economy, especially with the all of the other factors colliding in October.
There is not much we can do other than prepare for the worst. I think in the end there will be an agreement reached, but how much pain will have to be endured is still a mystery.
The SPY looks to be gapping down a bit Pre Market today and a Sell the Rip market appears to be back in action. We are sitting underneath some local support, and the next real support I see is around 425ish. A solid intraday trade could setup here or if you are looking for something longer term, waiting for retracement would be the way to go.
TSLA breaking through its VAH in a pretty big way. We discussed this last week as well and I hope some of you got the trade in. We are still looking at it today as it enters a pretty solid Low Volume Node. I would still wait for a retest of VAH, but if we open and start to run a Day trade could work out nicely.
Finally we have BA, which appears to really be catching a beating lately. Down this far I would expect a bounce at some point, but I wouldn’t anticapte it being a new bull run. That said we are at the bottom of a trading channel from the first half of the year, and we have a double bottom below us. So if you had some real guts, I would watch for volume to shift and sell a put spread to try and play the bounce. This is something I will be watching in the coming days.
As always trade well and Good Luck
As always this is all for educational purposes only. You are solely responsible for your trades as I am for mine. Nothing in here should be construed as financial advice, but only educational content about the markets and my particular trading style.