A Critical Look At What’s Happening In The Markets
I’ve been trading for a long time — since I was a teenager, in fact. By 1999, I became a member of the American Stock Exchange, and before the age of 25, I was recruited to be one of the original market makers trading Nasdaq 100 option.
All this to say, I’ve developed a keen awareness for the market’s pulse over the years.
To keep you abreast of overall market tone, I frequently update my Profit Amplifier subscribers, recapping the week’s action with predictions and any cautions for the upcoming trading week.
Here’s a brief rundown of what I shared with them this week…
Aside from the Kavanaugh confirmation soap opera occupying everyone’s time, the biggest news of last week was certainly trade.
The past week’s market action continued as I predicted in my last note, melting higher with a pop on Monday as Canada joined NAFTA 2.0, now called the United States-Mexico-Canada Agreement (USMCA), at the 13th hour.
Now our neighbors to the north and south have agreed to revamp the nearly 25-year-old agreement in another win for the Trump administration. Details on the deal will be released soon, but this is a good thing and removes some tail risk pertaining to economic growth. The deal, along with the already-known Iranian sanctions, are both pushing oil higher — a move that surprises me.
I do see some logic in an initial pop on oil as Canada and the United States come to an agreement, but, without details, we don’t know how Canadian/American energy resources are affected. There’s more here, and, the way I see it, there’s a higher likelihood that the deal will help ease energy prices — not drive them.
China: Trump’s Next ‘Yuuge’ Deal?
China and the United States have yet to come to an agreement, but I do believe one will be struck. Recent data out of China shows an economy slowing, both organically and due to tariffs. My research puts more blame on organic and global growth reductions than tariffs… again, reason for oil prices to stall a bit.
I don’t expect a major market breakout to the upside in the near-tem, unless we reach a trade agreement with China.
The Fed And Other Market Data
Fed Chair Powell spoke this week as well, reminding everyone that the Federal Reserve is sticking to their plan to raise interest rates. In his speech, Powell said gradual rate hikes are needed to hold down the risk of inflation. This week, we also get a look at employment data and ISM non-manufacturing PMI for September (released yesterday), as well as the BLS report on Friday.
Going into Wednesday, the consensus estimate for ISM non-manufacturing PMI (which measures business activity, like deliveries, employment, new orders, etc.) was for 58.1, a decrease from 58.5 last month. Markets needed to see a beat on this number — and they got it! The actual number came in at 61.6. This is the strongest result yet for the composite, which was established in 2008. ADP employment payroll numbers were also stronger than expected.
An Invitation To Trade With Me
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I’m Using This Strategy To Hedge Against The Unthinkable…
When the mid-term elections start to dominate the headlines, I’m preparing my readers for what could be one of the most contentious (and volatile) times we’ve seen in quite some time.
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I’ve just finished putting together my case in a special report. I lay out exactly what I think is going to happen, why, and what you can do about it. You can go here now to read everything.