Don here...
Two critical economic reports hit tomorrow. PCE inflation is expected to tick up from 0.2% to 0.3% month over month. GDP is expected to slow from 4.4% to 3%.
Slower growth. Rising inflation. Blake Young called it directly in today's video: this is a stagflation setup, and the Fed has no room to cut.
A less accommodative Fed has a specific set of losers. Small caps and tech are rate-sensitive borrowers. When rates stay elevated or rise, they get hit first. Financials face the same pressure with less borrowing demand across the board.
Blake walked through the specific levels and setups in tonight's video:
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The Russell is pushing back into oversold territory, with money flow dropping to 0.00710 and approaching the threshold where sellers take full control.
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The NASDAQ is already below the zero line on money flow, with a potential sell signal targeting 24,600, and possibly 24,250 by next week.
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Blackstone hit a new annual low today, falling from $190 to $125, with a bearish breakout below the monkey bar and a short-term target of $120.
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Visa is Blake's canary in the coal mine for consumer spending. Multiple sell signals this month signal fewer transactions ahead, not just credit defaults.
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Utilities remain Blake's top fixed-income substitute, with a retest of 47.00 to 47.10 on the table if today's high gets cleared.
There are still setups on both sides of this market. But the Fed's direction is shifting, and Blake laid out exactly where the pressure lands first.
Click here to watch Blake break down every level and what to do before tomorrow's reports
To your success,
Don Kaufman
Chief Market Strategist, TheoTRADE
P.S. The market dropped 20% in April. My members made money. That's not luck — that's what a 98% success rate on a structure that profits in three out of four market conditions actually looks like.
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