Selling🩸 will continue until morale improves
DST: survey to close an hour early on Wed
Quick summary:
The Q1 competition is up & running - click here to join the action.
NOTE: daylight savings time in the US. The survey will close one hour early on Wed (still 8am ET time, but different for other time zones)
SPX & NDX both declined by 3% and 3.3% last week, respectively, with the SPX bouncing around the 200-day moving average, signaling a persisting bearish trend. The sell-off continued on Monday, pushing below the 200-day MA, with another 2.7% drop by SPX and 4% drop in NASDAQ.
How long can this continue? Well, we are still in correction territory. Which means that we can get powerful rallies (Turnaround Tuesday anyone?), followed by more selling afterwards.
This week's focus is on the release of CPI on Wednesday, PPI on Thursday, alongside jobs data and consumer sentiment surveys. A hotter than expected CPI could cause yet another selling frenzy, whereas better than expected inflation could act as a short squeeze catalyst.
The parallel with 2018 was presented last week. This Saturday we will look at updated recession probabilities and whether a global realignment is happening.
The competition
This week brings key economic updates, including the CPI, PPI, and new jobs figures. Let’s capitalize on the insights to sharpen our strategies. With Q1 drawing to a close, your performance has been really good thus far.
NOTE: Don’t forget about daylight savings time in the US: the survey will close at 8am ET, but this is different for other time zones.
Keep your strategies sharp and your eyes on the top!
NOTE: For all those new to the whole thing, read more about it here or watch a video of Scott and myself guiding you through the survey, showing you all its features, and briefly explaining how the competition works.
Last week’s performance
Another choppy week in the markets as we saw SPX and NDX each take a dip, closing the week down by 3% and 3.3%, respectively. The SPX was notably volatile, bouncing around the 200-day moving average, a clear sign that the bearish trend persists. There was a brief midday rally on Friday, but on Monday the sell-off was even worse, and SPX lost 2.7% in a day. The trend is still clearly bearish:
Echoing the tumultuous early months of 2018 under Trump's initial tariff introductions, current market conditions reflect similar dynamics with new tariff threats inducing uncertainty. Unlike 2018’s rate hiking cycle, today's Federal Reserve is in a cutting cycle, however with inflation fears more pronounced and rate expectations already cut by 50bps for 2025, as investors anticipate a recession (bonds up, gold up, everything else down).
Attention this week will turn to Wednesday's release of CPI and Thursday’s PPI. If both of these come in as hotter than expected, this might act as another selling catalyst. On the other hand, a very cold CPI would also not be good, as it could be interpreted as an economic slowdown, and hence increase recessionary vibes.
However, perhaps something in line with expectations releases the pressure and turns the sell-off around. Or it’s one big nothing-burger and markets keep doing their thing.
Good luck with the predictions!
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DISCLAIMER: Neither the survey nor any of the contents of this website can act as investment advice of any kind. The results of the survey need not correspond to actual market preferences or trends, so they should be interpreted with caution. Oraclum Capital, LLC (Henceforth ORCA) is a management company responsible for running the ORCA BASON Fund, LP, and for organizing a survey competition each week, where it invites the subscribers to its newsletter (this website) to participate in an ongoing prediction competition. The information presented on this website and through the survey competition should under no circumstances be used to solicit any investment advice, nor is it allowed to be of commercial use to any of its readers. The survey and this website contain no information that a user may use as financial or investment advice. All rights reserved. Oraclum Capital LLC.
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