NAS100 falls premarket after poor revenue projections from META's earnings call last night and the recent onslaught of worse economic data. The combination of lower GDP and higher PCE this morning is weighing heavily on risk-appetite.

The risk of a market collapse seems more probable, especially if the remainder of big tech earnings this week come out worse than what investors expected. Right now, price is stuck between support and resistance on the 1D timeframe, and the next decisive move seems like it may be lower. If that happens, there is further support to test around $16,200 roughly.
-Frank

Gold's score gets a slight tick up from the trend reading and poor GDP numbers. However, slower growth and higher inflation might not be good in this environment. The metal usually thrives off a worse US economy and monetary state, but it now may push the Fed's decision to cut rates back further down the line.

That is what's causing yields to jump this morning which is ultimately bearish for the metal. Geopolitical concerns may have subsided for the time being as gold investors look towards earnings and economic data in the US.

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Retail may be right about US indices this time around as the majority are short S&P. However, Russell leans bullish which is the most interest rate sensitive of the indices. Metals are majority long but gold remains mixed.

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Bearishness on EURUSD can be shown in one chart. Rising retail optimism and lower COT positioning is a recipe for lower prices later on.

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Here's the chart of historical GDP numbers since January of last year. We have seen a substantial decline in economic growth since October of last year. This drastic miss could spell disaster for risk appetite if Core PCE m/m comes in higher.

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EURUSD is still a strong bearish setup on the EdgeFinder at -10. German CPI came in cooler than expected making the inflation divergence in Europe and US steeper. US PMI numbers roll in on Wednesday, the same day as FOMC.

That will be a big directional day for the dollar in general as we dissect what may happen to interest rates this year. If the Fed continues to sound hawkish about keeping rates where they are until they have more "confidence" in the inflationary decline, we may continue to look at higher dollar and yields for some time.

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Gold still remains elevated despite higher yields. Smart money looks confused on where they think this metal will go which is not a good sign for traders. With a heavy news week coming up, there are several things to consider.

If earnings shows growth overall, the market may continue to be optimistic despite yields going up. If PMI comes in higher, gold will likely get less optimistic. If the FOMC conference suggests higher rates for longer (maybe even to next year) gold could get hurt as well. -Frank

SPX500 is falling into neutral territory on the EdgeFinder after a bullish score was redacted from the scanner's sentiment. PMI news is going to change the score as well; lower PMI from services and manufacturing is going to make the score lower in those categories.

Earnings expectations and reports may be muted by the FOMC conference this week. Last week's rally is not a concrete sign that the market will continue to push higher as a result of risk-appetite. If blue chips and tech report strong numbers, the rally could continue.

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Retail has not changed much this week as the crowd stays strongly bullish on crypto, metals, small caps and oil. Indices are mostly mixed while USDJPY and GER30 are the top sellers.

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When comparing the inflation rates for the US and Europe, you can spot the directional divergence between the two. Starting between December 2023, EUR inflation has declined steadily while the US either remained stubborn or rose.

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This morning, the Employment Cost Index (ECI) came in higher than expected. Higher employee cost = strong labor market & sticky inflation.

I am short the Russell2000, looking to trail stops if price continues lower today.

- Nick

EUR/USD
EURUSD may continue to be bearish for the time being due to a lower projected rate in the EU vs US. German CPI came down this month while US’s latest support came in higher. FOMC this week will show where interest rates lie and where they will go for the year. The Fed is likely to conclude that it’s too early to cut due to a lack of confidence in the progression of falling rates.
-Frank

NAS100
NAS100 just hit resistance on the 1D timeframe and retraced pre-market. It is still early in the trading day so price may recover. But indices are down due to disappointing earnings in the US. Tomorrow’s FOMC is going to be pivotal for stock performance as well. Similarly to EU, NAS could suffer due to lack of risk-appetite if the Fed keeps pushing back the interest rate cut forecasts.
-Frank

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Gold
Metals grow weaker as a result of the shift in risk sentiment. Yields are an important factor in gold’s health so the higher it goes, the weaker gold may get. Price could test a broken trend line on the 1D timeframe should price move lower. If the Fed wants to remain restrictive, this could hurt gold as well.
-Frank

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