The Recession Has Been Cancelled
Market Update -January 25, 2024
The News
In the latest edition of Super Scary News That Isn’t Actually Scary At All, the much anticipated US Economic recession is avoided again as GDP data comes in higher than expected.
GDP grew 3.3% in the fourth quarter of 2023, beating estimates of 2%.
And the US economy grew by 2.5% for the whole year 2023. That’s an increase over the 1.9% growth in 2022.
The apparent good news - the economy is growing.
The bad news - media and headline pushers will probably keep calling for recession louder and more often until it actually happens.
Regardless, our filters are strong, and we’ll continue to focus on the data and the news that matters while discarding the sensationalism.
Personal Consumption Expenditures - PCE data comes out tomorrow morning.
A measure of the prices that people living in the United States, or those buying on their behalf, pay for goods and services. The PCE price index is known for capturing inflation (or deflation) across a wide range of consumer expenses and reflecting changes in consumer behavior.
- Bureau of Economic Analysis
The forecast is for a 0.20% increase, month over month. A light number would likely send stocks higher, especially small caps.
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The Markets
Here’s an update to Monday’s Russell 2000 Index Futures chart.
The breakout came, and now prices are consolidating as it may have gotten a bit ahead of itself. The long upper shadows could be a bit worrisome. But none of that really matters until we see the reaction to the number tomorrow morning.
Charts and updates will be on X as it happens.
In other news, BA and UNH are weighing heavy on the Dow Jones Industrial Average, with each down more than -6% at the lows of the day.
TSLA was down as much as -13% on negative earnings news.
The Charts
SPY continues to climb on day five above the upper Bollinger Band. The trend is strong and grinding higher. The RSI is poking into overbought territory.
QQQ also continues higher, though it is slightly more extended above the 8 and 21-day MA, and RSI is > 75.
IWM is still lagging in the short term. But as my friend Ian McMillan pointed out today, it’s still leading SPY in the move higher from the October 2023 low. So maybe a bit more patience is all it needs. We’ll see tomorrow if the PCE data can help.
DIA continues its high-level consolidation this week despite a weak performance from BA and UNH.
TLT has paused the short-term downtrend by going nowhere for a week.
DXY is moving the opposite of bonds. The Dollar has paused its short-term uptrend by going nowhere for over a week despite several attempts to move lower.
BTCUSD is resting on the rising 100-day MA as the 8-day MA moves down to the price.
The Closing Bell
It's a mixed market with a strong, steady uptrend in large caps while small caps, bonds, and Bitcoin take a break.
All assets moving together would paint a stronger picture. But rotation can do the job of continuing the bull market, too.
We’ll continue to watch the relationship between different markets and see if any weakness shows or if new leadership can emerge.
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The Disclosures
***This is NOT financial advice. This is NOT a recommendation to buy, sell, or trade any security. The content presented here is intended for educational purposes only.
Andrew Moss is an associated member of T3 Trading Group, LLC (“T3TG”), an SEC-registered broker/dealer and member of FINRA/SIPC. All trades placed by Mr. Moss are done through T3TG.
Statements in this article represent that person’s opinions only and do not necessarily reflect those of T3TG or any other person associated with T3TG.
Mr. Moss may hold an investment position (or may be contemplating holding an investment position) that is inconsistent with the information provided or the opinion being expressed. This may reflect the financial or other circumstances of the individual, or it may reflect some other consideration. Readers of this article should consider this when evaluating the information provided or the opinions being expressed.
All investments are subject to the risk of loss, which you should consider in making any investment decisions. Readers of this article should consult with their financial advisors, attorneys, accountants, or other qualified investors before making any investment decision.
POSITION DISCLOSURE
January 25, 2023, 4:00 PM
Long: MARA0216C22, METC, PYPL0126C65, TNA0126C36, TSLA0126C230
Short:
Options symbols are denoted as follows:
Ticker, Date, Call/Put, Strike Price
Example: VXX1218C30 = VXX 12/18 Call with a $30 strike
Up almost 14% inversing tesla 🙂
Consumer staples vs s and p 500 at decade low - another bullish signal.