11/15 Recap

The market gapped up hard this morning on PPI numbers and a seemingly strong earnings reaction from Target which was up 20%. I don’t really know what to say about Target other than it was extremely oversold, but it’s print was terrible if you want my opinion. Revenue was down 4% year over year and worse, online sales fell as a percentage of sales while we’re in a secular shift to ecommerce, so call me a skeptic but I think Target is still in the infancy of its decline to irrelevancy, not in the early stages of a turnaround.

The SPY is looking extended here. Tomorrow morning we have earnings from Walmart which will have big ripple effects. It’s early in the session but this candle so far is not inspiring today and could be the start of a reversal. Secondly the RSI is very overheated, you can see in under a month we went from max oversold to max overbought. We tapped the 8 ema last Friday after a short consolidation and just exploded higher after that, this has been an insane move.

The IWM was rejected today at some of the key moving averages above. This too is up nearly 10% in 2 days, that’s an index, not a single name, the move has been unreal here as well. I get the pent up demand to be in small caps because rates may decline, but they haven’t declined, yet, and people are front-running alot of hypotheticals.

Speaking of yields, they were up today, 2.5% on the TNX

TNX is still very broken, but all those people who said yesterday was the peak of rates, that just wasn’t the case. We are going to be in a back and forth for months on CPI,PPI, and all these economic datapoints especially heading into an election year where both sides are going to be trying to sway voters with how good/bad the data is.

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