Gold has hit 27 (and potentially 28 today) new all time closing highs on the daily chart in 2024.

Reminder: all time highs are often bullish.

Each 📈 represents a new all time closing high.

Gold up ~23.5% YTD!

With CPI posting the biggest drop this year, down to 2.5%, the Fed may be feeling some relief from inflationary pressures mounted from a cooling jobs market. The put/call ratio has turned away from fear to more of a neutral grade after the momentous turnaround yesterday.

Small caps are reading a +2 neutral score on the EdgeFinder, but may be looking at higher scores in the future. With the anticipation of lower rates this month, the RUSSELL might be an out performer out of all the US indices as borrowing costs weigh heavily on the index's price. Alleviating some of that pressure with the indication of further cuts (about 250 basis points by end of next year) may cause more demand for the index.

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The sleeper trade for the rest of the year and even into 2025 might be gold as yields fall, CPI drops, and labor cools. Regardless of a hawkish or dovish cut in September, the dollar will likely decline in value as we move away from tight monetary policy.

Although there is a lot of consolidation, price has managed to punch in higher moves eventually and may continue to do so. It may not look as exciting as the stock market, but it seems like a safer bet than hoping stocks break all time highs and continue to become overvalued.
-Frank

NVDA saved the market yesterday posting over an 8% gain on the day after CEO of the company Jensen Huang said there is "incredible demand" for the chipmakers. Inflation data showed relief in CPI and PPI this morning and has likely set the tone for the rest of the week.

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Retail is now heavily short SPX and GU, but they are long NASDAQ, DOW, RUSSELL and Gold. More of the same mixed sentiment coming from the crowd today.

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Heavy selling on the retail side for the S&P 500 index. COT does remain steady, but traders might have decided that the tech market looks better than the broader index.

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The trend lower may finally continue after this month's report. Inflation fears have probably subsided for the most part now that CPI y/y is only 0.5% away from it's 2% Fed target.

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Good morning ☕️

- Nick

Gold is flying high on rate cut expectations now pricing in a potential 50 BP cut...

Trailing stops and chilling. EZ Friday!

- Nick

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Keep this in mind when going into next week. More heavy buying of the yen and dollar, heavy selling on NIKKEI, USOil and many currencies other than dollar. Slight bearish readings on SPX and NAS, buying on DOW and RUSSELL. SPX and DOW near all time highs as we approach Fed meeting next week.

May be bullish leaning going into Wednesday's Fed rate decision. Odds are 49/51% on a 50 bp or 25 bp cut (essentially a toss up). Thinking that a 50 bp cut would actually be more bearish because it indicates the Fed needs to play catch up on saving the jobs market. 25 bp means that the Fed is not as worried and could be perceived as bullish.
-Frank

After checking the Fed watch tool, now the majority thinks we are cutting by 50 bp. That's not a good sign. That could mean investors think the Fed waited too long to cut rates and the job market is at a greater risk of recession.

Small caps are still favored to the bullish side by the EdgeFinder due to the increased chance of a greater interest rate cut than originally expected. US indices could be bullish going into the rate cut decision, but cutting by 50 instead of 25 basis points is not necessarily a good sign.

This shows that the Fed might have been too slow to cut and they need to step in to save the jobs market. The put/call ratio is neutral with AAII sentiment declining each week for the past four weeks. This is seasonally the worst month for small caps as well suggesting an average of a 1.52% decline.


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Tech stocks hit resistance around a falling trend line on the 1D timeframe and is looking to break above. Right now, it looks like we could be setting up for a potential reversals, but it depends on how the market closes today.

There are concerns over China's economy slowing down and hurting demand for business in the tech and energy market. This is on top of an heavier than expected Fed rate cut and a reversion of the yield curve. It's impossible to tell if a bearish move is coming, but it does seem like the upside is limited as chip stocks will have a harder time justifying all time highs on the NASDAQ again.

NASDAQ
US indices climb this morning in premarket trading as retail sales roll in. It seems that markets may be bullish going into the Fed rate decision tomorrow with mixed retail sentiment. Retail m/m sales beat expectations, but Core retail sales came in lower than expected. Not really much of a reaction from this data since most of the volatility is likely going to caused by tomorrow’s rate cut.

S&P 500
SPX touches near all time highs again which seems likely to test during today’s session. Upside may be limited, however. Analysts are still calling for a 50 basis point cut on FOMC tomorrow with a 67% chance that it will happen according to the CME FedWatch website. Any cut greater than 0.25% could indicate that the Fed has not acted quick enough to save the economy, specifically the jobs market. Although rate cuts are going to devalue the dollar, it doesn’t necessarily mean that the stock market is going to be bullish.

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