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Discussion
To say the least, there’s a lot going on. Today’s blowout NFP report had the precise opposite impact on the equity market that I thought it would, but with Israel-Iran likely prompting US government officials to keep the liquidity spigots running today may not be the cleanest look at how SPX truly “feels” about the prospect of fewer rate cuts going forward. So, I need to take the weekend to digest and formulate longer-term thoughts, but ahead of that I want to summarize my current thinking:
Right here and now I have little to no clue what the S&P 500 is going to do into Election Day. I thought I had a decent grasp on the tactical set-up, but with stocks very well supported in response to the hot employment report I was anticipating, now I don’t know. Like I said above, perhaps government liquidity spigots are open behind the scenes in order to keep the market elevated ahead of Election Day, and that’s throwing off the normal reaction the market would have to such a sharp move up in rates. I don’t know, but I increasingly don’t care. There are much more interesting opportunities outside of the S&P 500 on a variety of fronts.
First and foremost, KWEB is the perfect trade. Full stop.