Thread by @BlokTech_io

The #FederalReserve Chairman #JeromePowell spoke indicating the Fed not pivoting but slowing interest rate increases if the #StockMarket behaves & #PCE & #CPI inflation data is OK.

#Stocks have been vulnerable to THE KISS OF DEATH.

Let's take todays #PCE Data report 1-by-1

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1.) Jobless claims - close enough to market expectation (Neutral)

2.) Continuing jobless - higher than previous (Fed will like this, so good for stocks, sadly)

3.) PCE - as expected (Neutral)

4.) Core PCE - WAY BETTER than expected (GOOD)

5.) PCE Year - improved (But not great)

6.) Core PCE Year - improved (But not great)

7.) Real disposable income - still a bit too high for inflation (Not great but could soften a Recession so OK)

8.) Real consumer spending - still a bit too high for inflation (Not great but could soften a Recession so OK)

CONCLUSION: I don't see any reason for the Fed to increase 75-basis points. I project they will likely do 50-basis points.

NOTE HOWEVER: This is the market expectation (50 basis pts). Therefore, it should be seen as Neutral.

CAVEATS: The market is at a technical inflection point for a DUMP at a Macro-supply line. So if everything is Neutral, the market still Dump. I suspect a pump then dump.

The real question is:

Did we avoid THE KISS OF DEATH which normally comes after the Fed starts to pivot, which Ive been talking about for Months now?

I would say if the S&P 500 is any indication - we LIKELY will avoid THE KISS OF DEATH for now. And we may look forward to a bottoming structure on the NEXT lows. Which could even lead to a DOUBLE-TOP on stocks.

At risk of KISS OF DEATH when the Fed actually pivots 2023-24.

The Monthly and the Daily charts disagree a bit graphically -- here's the Daily -- but the KEY LINE to beat is based on MONTHLY closures. So we have to hold.

The Daily shows you just how Fragile we are -- and the vulnerable inflection we are at -- to avoid the Kiss of Death.

However, if DECEMBER ends up being a Green Month/good trading month, then we will likely have avoided the catastrophic collapse of the stock market for at least probably another half year.

Once the Fed pivots officially, perhaps in 2023, should we avoid the Kiss of Death this year, we will be vulnerable to it once again, perhaps in Spring or Summer 2023.

No Bear Market has ever ended (aka making new all time highs) without a Fed Pivot. The Fed can take their time. They could pivot in 2024 etc. So the market could play around with this range we're in for quite some time.

IF HOWEVER, the market makes NEW ALL TIME HIGHS
that would be disastrous for the fight on inflation (due to how the debt corporations can accrue is related to their stock prices in the United States)

In other words, the Fed would have to become incredibly harsh again. Therefore we are stuck between a Rock and a Hard place ---

AKA WE ARE NOT OUT OF STAGFLATION YET

If December avoids the Kiss of Death related to inflation, we will have successfully graduated into the Recessionary Era of concerns...

And likely the Recession will be the biggest threat to stock prices going forward (whereas previously it was Fed actions).

The Fed will likely thump us on the head whenever markets get too excited. And the Recession will keep prices in this Macro Trading range:

AKA - Accumulation time.

But that doesn't mean we can't have a run
I call those periods "Mid-Cycle Rallies"

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