Weekly Raid #59 - The Not So Silent Recession
Happy Friday Traders
Congratulations on making it through another week in the markets.
I hope that they paid you well. We have some pretty big news releases today as well as a few geopolitical things to watch. In addition, it’s Friday so you know what that means, time to buy some income.
News of the day
Non-farm payrolls and the Unemployment rate are out at 8:30 this morning. These are important for obvious reasons, especially with all of the silent recession news and thoughts being thrown around. It goes without saying that we need NFP to be positive and the unemployment numbers to be trending down, but with such a poor report earlier this week, I am not sure much can save it.
We then have a Fed speech at noon today, I am not sure how much that moves anything, but on a Friday afternoon heading into a long weekend anything is possible. I am old enough to remember when the Fed just spoke occasionally on the markets. Now I feel like those doddering old fools speak at least a few times a week. Trading them can be pretty simple though, look for an initial move and wait for volume to come in to fade it. Usually, it’s good for a quick trade.
There are a few things on a higher level I want to touch on today. First is this notion of a “Silent Recession” that seems to be making the rounds. I would like to propose that there is nothing that is “silent” about it. Anyone with two eyes and a brain can see that things aren’t great economically. Layoffs, Side Hustles, exploding consumer debt, 8% mortgages, and still increasing housing prices have been just repeated blows to the US workforce. If I didn’t know any better I would think it’s a coordinated attack on the dwindling middle class (relax I am not taking my tinfoil hat out).
The only thing Silent about it is that the Fed and Government reports keep changing the calculations and the goalposts to show that they aren’t failing miserably (even though they are.) The following is a great example of a headline article from Yahoo Finance:
From Yahoo.com on 9/21/23
You can almost feel the comedic undertone in it towards the working person. Also “personal finance realities”? What other kind of reality is there, at some point when the debt dries up that becomes all reality. Instead of gently mocking the reader, they should be focusing on how that could be a huge issue in several months’ time when all the excess savings has completely dried up and debt isn’t available.
At any rate, now that the rant is complete, This so-called “Silent” Recession is not so silent. Just ask anyone with a baby or who has to buy meat and groceries or work 2 jobs.
The upside to all of this, and the other point I want to touch on is savings. With rates running up again there hasn’t been a better time to stash some money in a CD or savings account in recent memory. There are a ton of Side Hustles you can start with no money out of pocket. AI has made competitor research a breeze, X now pays you advertising revenue if you meet its minimum requirements, and YouTube channels have never been easier to start.
Don’t let the Doom Loop inside the news cycle completely demoralize you. Things aren’t great, but there are plenty of ways that you can get started. It’s not easy, but it’s more than doable. If you need help feel free to hit me up on here or X.
It’s Friday, you know what that means for me, No Trading.
But if I was to trade here is a list of tickers I would look at and their respective charts.
TSLA is always an active trader on my watch list. It looks like it's gapping down this morning so I would look for a potential reversal into the Value Area of the year and a return trip to POC. Credit Spreads would be the trade of choice here., especially with how the IV on the options usually works out.
XOM is finally back to being interesting as well. Oil has taken an absolute beating this week and XOM is back to POC. It failed right around the 2 previous highs (yellow Line) and right where the yearly volume cut-off was. So basically right where you would expect it to. It’s not a trade I took, but I know several traders who did, proving this profession doesn’t need to be complicated, you just need to press the button sometimes.
AMD is last up on the list. It’s been consolidating under it’s 50 for what looks like another leg down. Again credit spreads would be a solid choice here. Timing on this could get a bit tricky so buying(selling) some additional strikes wouldn’t be a terrible idea.
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.