🐂 🐻 Watching the massive battle between bulls and bears
Nikki Dunn, Chris Dunn & Travis Devitt
October 10, 2023
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What’s on the Menu 🍴
We’re back after one of those U.S. Monday holidays where only government employees get the day off…
The markets and macro data are heating up - and we’ve got the sauce!
Here’s what’s cookin’:
Bitcoin Battle Zone Between Bulls 🐂 & Bears 🐻
Jobs Report Is Turning Heads & Markets 😲
What To Watch This Week 👀
The 4 Best Types Of Investment Accounts 📺
Today’s newsletter is a 4 minute read.
Bitcoin Battle Zone Between
Bulls 🐂 & Bears 🐻
For the past 7 months, Bitcoin has been chopping in between $25k and $32k.
Historically, the longer price consolidates the bigger the breakout (or breakdown) outside of the channel.
So what can we look to as a guide?
For the past few years, Bitcoin and the NASDAQ 100 index have been moving together like a brand new couple attached at the hip!
And right now both the NQ and BTC are pulling back into multiple moving averages:
Bitcoin: 100MA and 200MA
NQ: 50MA and 100MA
This week we’re watching closely to see if price gets rejected off of this resistance area…
Or if bulls are able to push price through this major zone causing a “popped stop run”.
This is where price touches and zone where traders have placed buy stop market orders to cover short positions in the even price starts to shift back into a bull run.
Patience is Key: As we’ve seen since March, price can go sideways for a long period of time before making an explosive move.
And the worst thing you can do is lose focus - Because the biggest moves happen when the least amount of people are paying attention!
Jobs Report Is Turning Heads & Markets 😲
Friday we got the highly anticipated Non-Farm Payrolls report (aka: job gains, and declines per industry).
It was an eye popping report that the market seemed to have a negative reaction to… at first.
When the report dropped, the market realized something:
This labor market is still resilient, and it might force the Federal Reserve to keep interest rates higher for longer.
That negative price action in the S&P 500 was followed by a very strong reversal higher (with a roughly 2% range of price on the day).
When looking a little deeper into the jobs report, it’s easy to see why.
While there is a lot of risk out there in the economy, especially with yields rising due to bond dynamics, it’s hard to have a recession anytime soon with people so fully employed.
(Of course, this fact may cause inflation to be stickier, which is why the market likely initially dropped on the data.)
Looking at the jobs data on a longer-term time frame, we are actually seeing a very healthy trend here:
There have been arguments about part-time work rising being a bad sign, but, the key here is what kind of part-time work?
Part-time work for economic reasons is the type of work we don’t like to see rising… and it’s not!
Part-time work for economic reasons typically rises during recessions.
It’s because employers are reducing hours due to slow business demand, or there’s an inability for these workers to find full-time work.
The trends overall in the labor market across full and part time workers still look healthy.
How long can this last is the question?
And if it’s not the labor market that pulls us into recession, what will it be?
All eyes are on commercial real estate and bond yields from here.
What To Watch This Week 👀
Last week was a rollercoaster in markets, and this week promises to be another action packed adrenaline rush.
We’ll get inflation data for September with both the CPI & PPI, and the crucial Q3 earnings reporting season kicks off.
How the market reacts to reports from JP Morgan, Citigroup, and Wells Fargo on Friday could be very telling. Yields have been rising rapidly which could put pressure on some banks.
Crude oil prices collapsed last week from over $90 a barrel to below $82, but a violent turn of events in Israel over the weekend is already pushing prices back up to start the week.
There’s no shortage of areas to keep an eye on this week:
📈 Rising
Tech & Semiconductors
Long term bond yields
Credit spreads
📉 Falling
Utilities
Solar
Consumer staples
Refiners
The 4 Best Types Of Investment Accounts 📺
In today's video, Nikki addresses a high-quality problem—having more cash flow than you need for daily expenses.
If you've already built your emergency fund and are contributing to your 401k, you might wonder, "What's next?"
Let’s explore additional investment accounts to optimize your cash flow and make your money work harder for you.
Food For Thought 🧠
"Courage taught me no matter how bad a crisis gets…
any sound investment will eventually pay off."
- Carlos Slim Helu
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DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.