To my eye, conflicts and inconsistencies abound in today’s micro. Strong producer prices data spurs Fed rate hike talk (December is in the bag anyway), slowing China growth hits commodities, T bonds and gold get the risk ‘off’ bid to a degree as yields drop (despite the inflation data), the dollar is off and the Euro is on. It’s typical I guess, as man and machine rush to push their respective buttons in reaction.
I’m not doing anything until the dust settles and we can sort out inflationary risk ‘on’ vs. risk ‘off’ question in the short-term. We’ve gone over short-term technical parameters for the stock market in an update and I’ll manage individual positions the same way. If they break, they’re gone. If not I “take the pain!” to quote Sgt. Barnes.
On the longer-term, the macro plan is still out there. Obviously, the short-term moves have to happen before any changes on the big picture eventually come into effect, but as of now I’m watching the 3 Amigos, gold vs. stocks, the Continuum™ and the yield curve. These are the elements that I think need to come into place for the preferred big picture plan.
Subscribe to NFTRH Premium for an in-depth weekly market report, interim updates and NFTRH+ chart and trade ideas; or the free eLetter for an introduction to our work. You can also keep up to date with plenty of actionable public content at NFTRH.com by using the email form on the right sidebar. Or follow via Twitter @BiiwiiNFTRH, StockTwits or RSS. Also check out the quality market writers at Biiwii.com.