Over the next twenty-four hours, there should be a couple of relatively important market-moving events. First, sometime today, I suspect there will be some kind of “trade talks are going well” pablum from the China/US delegation. As I mentioned, you can expect that vapid nonsense for years at this point. Second, tomorrow morning, an hour before the opening bell, the CPI inflation report comes out.
At the moment, though, the market doesn’t really know what to do with itself. One look at the /RTY over the past day illustrates a total lack of conviction.
I saw this morning that the tech giants are still hurling ungodly sums of cash at 20-somethings in the highest echelons of computer science. This is obviously not sustainable, but I suppose the logic is that at some point there will be only one true winner, and companies are willing to spend any amount to be that “one“.
I also heard the other day that AI will be mankind’s last invention. If that isn’t a dismal thought, I’m not sure what is.
In any case, the massive expenses from tech aren’t hurting its case much. For 2024, the /NQ traversed from one major Fibonacci to another (its lifetime peak), after which it lost the entirety of those gains in a matter of weeks, only to regain them again even faster! If you feel dizzy, you’re not alone.
Meanwhile, fear has completely left the building. The VIX had its swiftest plunge in market history with the latest swoon. Never before have we flipped from terror to greed with such speed.
It’s all just noise at this point, though. The big face-off remains with the /RTY, with the bearish (red) and bullish (green) patterns ready for war. Hopefully by Wednesday morning, the victor will be clear.
In the meanwhile, as with yesterday, I remain cautious and light. I have a mere fifteen positions and am only using one-third of my buying power, plus I’m ready to make a very hasty retreat if things turn ugly. Hang tough, folks. It’s going to be an interesting twenty-four.
