Weekly Raid #55 - SPOOky season is upon us
Happy Monday and Welcome to October!
With the Dawning of a new month, there is a lot to be on the lookout for, aside from apple cider donuts and pumpkin spice everything. Let’s jump in
News of the day
Out of the gate this month we have some news on deck.
ISM PMI is out at 10 a.m. this morning. This release really has the potential to move the market as it has been under 50 since last November at this point. This is a stretch not seen since the Great Recession in the late 2000s. While the rate of job loss among factories has started to slow, it may be because they have started to meet minimum operating requirements. This entire release is important, but watching price changes and new orders will be particularly revealing. With “Bidenomics” in full swing and gas slowly (or not so slowly) back on the rise price increases could be imminent.
ISM Manu. Chart
Finally, there are a ton of speakers today. You know what that means, volatility. Keep your head on a swivel with the speakers, they have been known to put their feet in their mouth on more than one occasion.
First off, if you live in the Norther Climates, take a few minutes (or more) and go check out the leaves starting to turn on the trees. This isn’t market-related but it’s a great reset from trading. Mental health and stability are about as high level in this game as it gets.
Now onto the market-related item(s).
Debt - that’s what we are back on today.
The pandemic-era pause on federal student loan payments ends Sunday, leaving as many as
40 million Americans on the hook for a new monthly bill they haven’t needed to make in more than three year's
Discretionary income is about to take a hit as many people have to… twitter.com/i/web/status/1…
In an economy that is struggling already, student loans are set to restart for nearly 40 million borrowers, and with the average payment being somewhere between 250-350 a month, I would expect to see retail numbers start to slide into the holiday season.
This is typically the time of year that makes or breaks retail companies, so advertising campaigns could also be pretty blatant this year as most companies have already started to feel the burn of lower discretionary spending.
As a public service announcement related to this holiday season, remember that getting something on sale is only a deal if you need the item. Your number 1 responsibility is to your own wallet and financial health, not to a Fortune 500 company’s bottom line.
Feels great to have the charts fired up this Monday Morning. Let’s see what we are looking at. I am still looking to short any rallies in this market, but man oh man everyone and their uncle is calling for a short. So I am going to be extra selective until I feel more confident in it. Relief rallies can be vicious.
TSLA banging up against its 50 this morning and forming a bit of a reversal candle while it’s at it. It’s kind of in no man’s land in terms of volume on a longer-term chart, but it does have its yearly VAH right above it. On a shorter timeframe, I would look for 260 to hold above us before looking to reshort it. If we don’t hold 260, the rally could be on.
INTC hitting the 50-day from the opposite direction as TSLA. We are also in a low-volume node for some support. I still think we are in a general sell-the-rip mode, but Intel offers some particular advantages in the AI space so it could fare better than the general market. Just watching this today, but will be looking to initialize a trade this week.
Finally this morning I am watching KO. They have taken a beating this year, especially in the last few months. This is not an option or spread trade, I would be looking to add it to my longer-term portfolio. I still believe that this dividend giant is worth holding, and as we drop it becomes more attractive to me. On a very long time scale, we are still above the POC in the mid-40s so I will be willing to add all the way down into the lower 40’s. This would not be a trade for the faint of heart, but it will be one to scoop up some KO at a solid yield.
KO monthly chart
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.