Oh boy, we're back at it again. The stock market as I am going live here is going straight red again into the close. Here we've got about 90 minutes left before the Christmas holiday. Uh, keep in mind when it comes to options trades which were implicated in the big end of the day drop on Wednesday Uh, that was tough.

That was all of a sudden a big old tank at the end of the day as well. which could be what's happening now as well. Zero Day Option Shorter term option trades. Why would option trades potentially be tanking the market towards the end of a week right before a holiday? Well, a few reasons.

Number one: A lot of option Traders leave for the rest of the year and guess what they generally don't want. They don't want to hold on to option contracts any more than they have to because if you keep holding those option contracts going into the holiday and then potentially you're not back in in the office until let's say, the first week of January What you're really doing is you're sitting there letting the Theta Decay acre on options for the next week or two. And that, especially on shorter term options, is very expensive. So number one could be an options issue.

Number two: Once again, you're pretty high on the RSI You're sitting at 68 on the QQQ, you're sitting at 68.8 on the SP By you're sitting at about 57 on Tesla Tesla Once again getting rejected at that 258 level this morning in intraday trading Nvidia dropping off about a percent. The only thing that really consistently is able to push through here is Coinbase, as it continues to drive up a lot of folks talking about coinbase potentially actually being a nice short. Once the ETF for Bitcoin is approved, we'll see Rocket Lab is one that we analyzed in detail this morning in the course member live stream. So if you're curious about that, make sure you're part of the course member live streams.

Uh, but even uh, some of the other plays here and PH down, Uh, down about a percent, you've got a firm showing that same sort of tanking Behavior going into the end of the day's close here. Uh, Micron as well. It seems like right around 11:00 a.m. Pacific Time 2:00 P.m.

Uh, we ended up getting this selling off. Nike Now down 12% It's been selling off through throughout the day. Uh, though it did try to rally a bit in the morning, recovering to only about 9% down, only to start giving that up again. And now this comes on the heels of actually better data uh, than we expected for Pce.

Actually substantially better than expected. in fact. Nick T put out yet another one of those delicious charts. Take a look at that deliciousness right here at E.com This is Eac.edu It's the information that I'm looking at the data myself and my team were looking at.

Nick T Visualizing Pce inflation, you can see we're actually at the lowest level that we've seen here on PC in over three years now. Uh, and in addition to that, uh, I mean inflation is just basically being expected to be almost solved at this point. Uh, Traders Are wondering: is it possible that it's time for some contrarian bets rather than the same bet over and over again? Consider this right here. According to: Bloomberg the least desirable trade predictions for 2024 are being long China And short bonds short bonds would mean that you think there's a chance yields will actually go up.

You would have thought that after weak inflation data this morning and better, more resilient data on cons on durables, we would have seen the 10-year treasury fall with that weak Pce report. No, we actually are now seeing 10-year treasury sitting right back at about 3.9 where as low as about 3.94 this morning. So a good Sixpoint Swing there now. positive on that 10-year yield.

Uh, so some are seeing potentially a setup going into 2024 as a contrarian opportunity to go long. China Short bonds? Uh, As a few people are finding those to be desirable trades right now, others are looking at end of the year tax loss harvesting. So we've got options. We've got contrarian movements, we've got relative strength indices.

Others are looking at potentially tax loss harvesting if they have any losses left for the year, and maybe taking some losses, rebalancing their portfolio a little bit as they go into the year. uh, and others consider why this stock market seems to be falling right now is maybe an opportunity to lock in some of the year-to-date gains that have been had already. Lock in those year-to dat gains, Send your uh investors a nice little letter talking about how great you all have done and move on to the next year. That's what some are saying.

Government rages are also finally outpacing private sector wage growth. The last time this occurred was in 2005. 2005 was the last time we actually saw government sector wages the red line here above the Blue Line uh which are private sector wages Keep in mind as we wrote here on Ec.com free for you to view here. Uh, we wrote that uh, you had two and years between the last time that happened and now uh, and so that's uh, potentially seen as a uh, an opportunity uh for another recession coming.

A lot of folks say that uh, the next recession is around the corner. Others say, hey, even two and a half years leaves plenty of an opportunity for some Euphoria between now and the next recession. Although there's no guarantee the next recession is only 2 and 1/ half years away could be 5 years away. could be 10 years years away.

could be one year away. Who knows, we could be in it right now. But anyway, this uh, it is very common for the government to uh to show its wage gains later in a cycle that red line here. Very common to see that because as the regular economy stops hiring as much the business, the private sector economy stops hiring as much the government is finally able to compete for those workers.

New home sales missed massively this morning. A negative, uh, 12.12 month month figure, though we'll talk about that a little bit more, along with some house hack updates later in the day. Uh, some of the other things that are escalating right now is you're seeing Iranian Intelligence now directly supporting Houthis with information for their drone targeting. Uh, remember that a direct involvement between the United States and Israel would create a substantial escalation in the region and we're already seeing oil prices rise substantially, leading to, uh, nervousness that, uh, we could end up seeing inflation from oil prices again, sitting about 79 bucks, just below the 80 we were this morning or had this morning sitting at 79 bucks on the international blend.

Uh, we do have us warships on the way to the region, so it's worth remembering that even though we have us warships on the way to the region, there's still a lot of uncertainty about what's going to happen in the Red Sea if you click down I I now have linking on Ec.com for individual posts, so for example, you could share the link to this piece and it gives you a break break down here. but I broke down us warships on on route to the Red Sea I Personally believe that this is going to provide stability in the region hopefully. and uh and we start uh, escorting cargo ships through the region again. Basically what you're doing is you're using government DOD money to Forstall or limit the growth in oil prices or an inflation uh Albert Edwards of Goldman via Zero Hedge They had a piece on this this morning, suggested or warned of a collapse in it valuations.

so Tech valuations specifically in the Magnificent 7 I like to call them the Magnificent Six since Tesla has been so stuck in the mud. but anyway, uh, you know it. uh uh I Personally believe and the team believes that while we agree that these are definitely companies that will face competition or correction in 2024, it's more likely that we would end up seeing consumer Centric that 60% side see more of a correction. We think that would be like your your uh staple uh SL discretionary mix mixes like your Nikes tar Target Walmarts Costco those uh and instead you might see other Tech actually outperform to minimize the appearance that only the Magnificent s are outperforming some.

see uh here now an opportunity to hedge going into the Uh holidays. so some are calling this Santa Claus hedging Morgan Stanley CEO walking out the door since he gives up his post this the CEO on January 1st he thinks that financial markets will actually take off once the Federal Reserve is done. Officially done raising rates. Now we think that's already behind us, but some folks actually still think there's a chance the FED will end up hiking and uh into next year.

He believes that the Federal Reserve in an interview here with The Financial Times will make it exceptionally clear that the direction is down and not up for rates and that could lead a lot of money to flow into risk assets. Pimco's Chief Executive sees something very similar. While he sees a 40% chance of a mild recession, he thinks there will be a tidal wave of money coming to Uh bonds and risk assets like equities as well as mortgage backed Securities as $ trillion sitting on the sidelines in money markets end up moving into the risk Market Atlanta Fed released its latest GDP estimate actually Bringing Down the 2.7% estimate down to about 2.3% We're also right now seeing a decline in the average number of workers. Um worked basically.

Uh, we can see that decline usually only happens going into a recession. However, it did occur in 1951, 1956, 66, and 97 without an immediate recession. So it is possible you could have a decline in worker productivity without a recession. It's just less likely Nick t as we saw this morning nailed Pce.

But here are some updates on Ec.com in the meantime so you can take a look and explore some of those in a little bit more detail if you want on Ec.com Uh, but again, some of the other things that are contributing to a bit of a decline that we're seeing here into the close uh or uh fears and it looks like the NASDAQ actually is trying to recover. Look at that bounce. Almost a perfect bounce here off of the Uh 406 line. Let's zoom out on that.

That's 406 right here. That's pretty high on the Fibs. Uh, that is a positive read on the Fibs compared to the previous all-time highs. And so we are bouncing on that 406 line.

Almost a perfect bounce there on 406 for the Fibs. Some of the reasons again: High RSI Going into the holiday season here. In addition to that, closing out some of those zero day options, closing out some of those Hedges or maybe even creating the hedges as you're going into the holiday season, a lot of Traders take off for the rest of the year won't be back until the beginning of January and when you come back in the beginning of January, you might want to set up different trades based on information you hear over the next few days. Some of the Catalyst to pay attention to between now and January is going to be.

well, we're even at the beginning of January. Uh, are uh, going to have to do with the BLS Jobs report. The next BLS Jobs report. which will give us our December 2023 numbers will come out January 5th.

that is the first Friday in January. Then you have the CPI schedule of releases that we are looking for. uh January 11th uh release which will be the Thursday uh or the next Thursday We have uh, the Fed's Fomc schedule. The next one will won't actually be until the end of January January 31st and February 1st.

Uh. hold on. That was last year. Hold on.

Let me get that right. Uh O Nope. Hold on 24 calendar. Yep, Okay, it'll actually be January 30th to January 31st and we'll also have earnings that begin in Earnest in the second week in January so we'll be paying attention to a lot of those.

I think Tesla's the third week in January So earning season coming up. A lot of folks also believe that trimming trimming some of your winners before earning season could end up being a good opportunity. I'll continue posting updates here at Um Ec.com It does look like after this tanking that we just saw nice reversal here, looks like the Q is now going positive again. Will stocks go positive into the close? How interesting! Here's somebody on X who says this dude is so clueless? All he does is fearmonger.

Wow. I think the last thing I do all the time is fearmonger I think I actually get more criticism that I'm more bullish than fear mongering. So here's somebody who maybe has no idea uh what I actually actually do. Maybe they don't actually pay attention to what I do? Who knows Uh, someone here says I'm probably going to trim a little bit next week.

A lot of people trim towards the end of the season and then rebalance to set up. uh, sort of reload the shotgun if you will going into next year somebody Robert here says let it fall so I can go buy some more In the Elsa voice, All right, somebody here says stag flation stag flation Stag flation I'm not sure where you're seeing the flation part. uh I I am seeing stagnating in the economy I'm not seeing where you're seeing the inflation part. Maybe you could point me to see to tell me where you're seeing inflation I Can tell you you're seeing some inflation in AI chips.

You're seeing some in ski resorts and you're seeing some in the Aerospace sector. But beyond that broadly, you are more seeing deflation and Rapid disinflation. Max Here says he bought the dip on paler Judson says hi Brandon says little bounce. options flow bullish right now says red Bill 21 and ghost Thief says don't let the Algos scare you, don't get or don't be a paper hander just because the uh, the Alos are trading.

uh don't trade China just the US says Mega howto Man what dip? Yeah, that dip went away real fast H look at that uh look at that. We've got uh up about 10 basis points recovering nicely here. Now on the cues with Uh Intel here at a recent all-time high almost $48 Nice recovery here. Even Tesla's trying to recover a little bit n Phas ah getting a little stuck in the mud there and affirms recovering as well.

We'll see what happens as we go in, but these are some of the factors that uh, the suits and Wall Street are believing uh are going to be catalysts going into next year we do have Wall Street consentes expectations out for uh, the S&P 500 Tom Lee your true perable. Expecting the S&P 500 to be up as much as 10% by the end of next year index so far up about 23% Energy and Communication stocks are forecast to outperform I Believe that as rates come down, especially is what you have with Uh companies like Enphase Looking pretty soft, you have Uh Sock Genen at a price target for the S&P 500 to 475 along with Wells Fargo at 4625 Goldman Sachs 5100 Cap markets 5100 Oppenheimer 5200 up there with fund Strat You do have uh, some more fears though, that the relative strength index will be driving a pullback here into the in the near term. potentially into the close though again. so far it looks like we're going green again.

No tanking here. We're going to have to change the title to uh uh, Wire stock tanking again? uh or are they? we'll change it to that or are they there we go. A little flipflop there as that uh, diple dudla we had, uh is starting to evaporate. Either way, a lot of the content we've just covered.

Still very, very important uh to be aware of as we go into the close. So anyway, Uh. with that said, thank you so very much for being here And uh, as usual we will see you in the next one. Goodbye.