BY ANDREW GIOVINAZZI
August 22, 2024
Yo Pit Crazies,
One thing about the stock market is that it will surprise you. I have been doing this for 35 years and the only thing that does not surprise me is, well, nothing. Nothing surprises me when it comes to stocks. Target Corp (Ticker: TGT) I have not stepped foot in years but somehow consumers are still spending money big time. Another narrative was that the consumer was dead. It appears to be not the case as Walmart Corp (Ticker: WMT) blew the doors off too.
TGT 3 Month chart with 1 day candles
I saw on Fintwit, and I believe this myself, that Boomer parents are helping the kids out with bills. I have very little anecdotal evidence but that is my thought. The Boomers cannot spend all the dough the stock market gave them so they are helping out. TGT after today is up around 15% in 2 years, WMT up near 50%. I own WMT and I do not own TGT.
I highlight this because the Fed does not need to lower rates if the consumer is spending more. Traders are likely feeling this too since the stay the course policy has pushed stocks up even as it has punished Uncle Sam which I believe is the intention.
With the FOMC down, but Jackson Hole to go, traders are still on edge.
See why here.
The Yield Zone is near flat
Through Option Pit Research we look for new indicators to add to our Edge Hunter lIne. It is not for everyone, EH that is, but we do want to make the accessible ideas available. Right now the Yield Zone is on a ridge where the market can tip either way.
My guess is that two Jpow speeches in one week are just too many for traders. They need to wait for what he will say before they commit. That is why the Yield Zone is hovering near 0. If it slides to negative past Friday look out below for SPX but if the bid holds up, SPX is on its way to all time highs.
Check out our Yield Zone video here.
To Your Trading Success,
AG
Andrew Giovinazzi
30-Year Trading Pro
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