Long story short - dollar strength (over a certain level) has been a consistent sign of dysfunction in the global economy in the era of globalization. I love a strong dollar as a traveling American, but I also get that if you crush your trading partners a global recession will eventually come back to bite us all (I'm definitely not saying I agree with the approach - only that I understand it...to the extent a non phd economist can understand it). 

Fascinating event coming up. Jerome cannot be completely honest about needing 50 (that's 100% honest) but he needs to essentially crash the dollar ASAP (keep crashing it). He's a saint, so the election plays no part in his thinking, but I'm sure the market does (e.g. he doesn't want to spark a crash).  If I was stuck in his position, I would do 25 and hint in very strong ways, just short of coming right out and saying it, that there would be AT LEAST a 50 cut in November. The dollar would dump immediately and the banks and wealthy would cheer. I'm just not sure how he accomplishes that with hints (you know he's not going to say it directly).  And, I still think he is riding a fine line to significant weakness because emotional humans are trading, not machines that realize that QE is either here already or coming quickly.  

Or maybe he's playing 4D chess and leaked the 50 to get some shock value out of the 25 and plans to make up the difference ++ in the background with QE (e.g. many people will be thinking something is very wrong if 50 so they might be shocked in a positive way with a 25, whereas it didn't have that kind of dynamic embedded before the leak). 

Full banana mode confirmed

Not shocked that the Fed leaked to the WSJ yesterday about the potential for 50 bps cut, but I think the market has the highest probability of experiencing a crash like event on a 50 than a 25.  The problem is, they kind of need 50 to follow the rest of the world and keep the dollar weak and they can't just go on stage and say "look people, I don't know what you're smoking but this nonsense about strength when GDP is under 3 and Gov spending is above 6 is nonsensical"  The market would crash...so they are trying to wiggle their way into position and end up coming into the week with a nearly 50/50 choice between the two (and that took them leaking to Nick at WSJ). They're in a pickle.

Find the last time we went into Fed week with a 50/50 outcome on the board. Good luck. 

SPY 5m - H&S setting up. Given the amount of times price has run through a demark 13 today, I'm thinking we either blow straight up from here and negate the pattern (full banana mode) or cut just below the neckline before reversing to make a new high (tricky banana mode) 

Simple way to look at it: if the Gov is injecting 6% of GDP per year and the Atlanta Fed is projecting 2.5% total GDP this year,  is the non Gov economy in a recession or not? 

These V bottoms are just the result of unemotional math (so yeah, AI would fit the bill).  We have been and will be in a recession with Gov spending backed out - it would be severe at this point, but Gov spending is not backed out and won't be backed out so we do not enter a recession on paper.  Asset prices go up broadly because of currency debasement - that's just what asset prices do (almost all go up during debasement, not just the ones accruing value, which is a short list).  There are many academic papers that discuss when you enter the diminishing return phases of debt fueled stimulus and we're WELL PAST the line (I think around 70% of debt to GDP) where countries get a better than 1:1 return on debt.  We're now quite negative return on stimulus and accelerating. 

Except that one year where they printed and spent 6% of GDP in excess of revenues (currency debasement) for multiple years, while the economy was very hot.  Oh wait, that's never happened before now.  Banana Zone seems more likely, but, either way, it's hard to make historical comparisons when conditions don't match well (which is why we keep getting V bottoms - people thinking it's the same as before when it's not). 

AI cracks me up sometimes, but I'm not sure how Kenny Loggins would feel about this take on an 80's classic. 

Decades of nerdy excel life helped me out for once   

Yes, freezing the header row would be awesome. 

Matt - After using it for a while now, I have a suggestion about the format of the HP KISS section table.  It would be very helpful if the star column (far right, used to mark favorites) is shifted to the far left, maybe in between the "Minutes" and "Stats/Trades" columns.
I code a bit here and there and have lots of experience with advanced Excel use, so I get that it might not be as easy as it sounds e.g. maybe you have a lot of dependencies created with the structure (using column numbers in code instead of column names...which is still common). Just thought I'd ask because it would be super helpful for me visually as I update my favorites regularly as the "hot" sectors of the market change and some days I'm just game for more alerts than other days. In the current format, I find myself clicking the wrong star a lot and I've taken to keeping a ruler next to my computer to hold against the screen to check the line.

*before I started using table column names instead of column numbers for things like concatenation, if I ran into an issue where I had invested to much time to go back and change the structure, I would consider adding a column at the end that repeated a previous column (simply for visual help). If that was the situation here, maybe you could bookend the table with the "Symbol/Chart" column data (e.g. NVDA shown on both far left and far right)

SPY 2 hour - if my model holds up, the slope projects 570 around October 4th.  Feels like it will do that by tomorrow (and it has achieved targets faster than projected in recent past), but there will probably be at least some back and fill between now and then. Or we could finally be in Rao Pauls predicted "banana zone" where prices go parabolic beyond any historical norms or what people thought could be possible.  I think we've been in that zone for years, but he thinks the real party is still to come. 

Hard to argue with this standard CNBC talking point in today's world (don't want to get cancelled).  But not everyone has the same opinion about Fed independence and their impartial, non partisan, god like approach.  The vast majority of their employees are registered in the same party. I believe it's over 70% and the rest are registered as independents and a very small, less than 10%, are registered with the GOP (there are actual peer reviewed studies on this topic available online....I'm guessing based on reading many months ago...please fact check me). But maybe this particular herd  of PhD's is so amazingly intelligent and devoted to their craft and their duty to impartiality that they avoid any alignment with their strongly held beliefs in their personal political lives?  You never know. 

Looks increasingly likely that the Fed is going to start an easing cycle next Wednesday at all time highs in the equity indexes, firm to slightly rising inflation (if you believe Gov data), and 6 weeks out from a major election. The press conference commentary should be interesting!  The ultra wealthy are essentially demanding either 50 basis points or super dovish speak to go with 25.  They will probably get what they demand (super dove speak from Jerome - 50 is off the table).

Nice candle. Maybe everyone realizing the above at about the same time and deciding to ease up a bit on the squeeze until we actually get the juice?

Silver great today, but you could throw a dart at just about any name in the broad basket of names associated with protecting yourself from Govs with fiat currency issues and done very very well today. Silver is leading (on my list) for the day...actually #2 behind COIN. We'll see how it ends the day, but I'm also thinking that silver hasn't done well relative to the others in the basket on a risk adjusted basis - even bitcoin has been better (risk adjusted). Given how much heat SLV has taken, I would argue it should be outperforming by even more today. GLD, although only up a meager 1.65% on the day, didn't experience anywhere near that pain that silver has.  Maybe silver will catch up? 

Interesting spot to try a short on the QQQ's.

Shorting the QQQ's is like betting on a poker match between two players when everyone, even the player on the other side, even the announcer covering the match, knows that the dominant player is counterfeiting chips under the table. They all know but they just make up cute names for counterfeiting and continue the game. So, I won't be shorting - just pointing out some "levels of interest." 

The toasty PPI has people selling bonds (yields rising) and the 2/10 curve is about to invert again (like I mentioned yesterday).  It was under 1.0 for a hot second overnight before recovering a bit.  Gold sniffing out what many knew was inevitable - the Fed is stuck in a box with no good way out and will choose to ease into inflation, causing more inflation, to save the banks and the wealthy. 

Nice and toasty PPI today. market should be biased to the upside for sure with inflation still going strong, basing and accelerating in some areas while the FED has already locked themselves into at least one rate cut (lots of wealthy asset owners will argue that the FED has has promised more than one and a cycle instead  because it's never enough for them no matter how much it hurts the rest, but we'll see). Very good for asset inflation in the near term.

After that 4.1% sticky CPI at 10:30 today, I think market would explode higher on a hot PPI tomorrow (Hot, but not too hot). Inline probably ok, but anything weak and we might give up today's gains. KRE not at all happy about the market pricing 50 bps down to 15% after today's print, but that could explode higher with a weak PPI (weak PPI was the canary in the coal mine with China). By the time the market figures out that a refinancing cliff is approaching quickly and we need to allow some hyperinflation if we want to survive it, we could be at 5700 or higher.

Hot PPI would probably also invert the 10/2 yield curve again. Nice move in that direction today as bonds get sold. 

SkyNet definitely winning today. Algos fighting the algos - the algos with the most capital firepower pushing below and above obvious levels to force people who think they're trading mechanically to do what they want.  A lot of traders using Fibs these days? Cool. Push it above the 100% and force all those rule followers into a bullish switch (then get ready to trap them again).