Hey There Income Hunter,
Who would have ever thought that the Jobs Opening and Labor Turnover Survey (JOLTS) would boost the market the way it did this week.
However, when the jobs market is the only thing keeping Powell’s foot on the brakes of monetary policy, it warrants such attention.
On Tuesday, JOLTS reported by far one of the largest drops in job openings ever.
This number is a huge eye-opener for Powell because he has made many references to the ratio of US job openings per unemployed person as one of his preferred metrics.
Today, we will look at the signs that we are very close to the Fed pause in tightening and a lay-up trade for you to jump on a new trend.
Cover Jinx
Here is the latest Bloomberg BusinessWeek cover …
The summary at the bottom states:
The Fed has turned the US dollar into a wrecking ball – and there is no end in sight to the carnage.
There you go …
The number one reason to expect that the high in the dollar (DXY) is in.
To me though the most important sign of a pending Fed switch away from tightening was the UK abandoning QT and immediately resetting QE to bail out the bond market.
I believe the Fed pause from tightening will be due to a break in the financial system and it will be related to the bond market.
Watch Silver
You want to watch silver on this one.
Silver leads precious metals higher when a new trend is about to begin, and I believe the new trend in precious metals was confirmed this week.
Let’s take a look at the turn in trend over the past few weeks …
The metals are the first to rally in anticipation of a shift towards an easy money policy …
All we need is one more higher high above the $21.25 level to confirm the bottom is in and we are in a new bull market.
I had a nice +73% win over the past couple of days in SLV and reset a bull trade by buying calls yesterday morning.
Once we break $21.25, I will add calls and along the way will sell calls above to add income to the trade.
Trade it with me in Power Income Trader.
Bring It Home
I have waited patiently for the Fed pause, and I have said it was coming before Thanksgiving.
I still believe that.
In the meantime, selling the indices (SPY, QQQ, IWM), banks (XLF) and high-yield (HYG) ETFs has worked well.
At some point the narrative that bad news on the economy is good news for the markets will revert back to bad news is bad news, period.
So in the weeks and months ahead I believe we will get to the point where stocks will go sideways to down while metals and commodities trend higher …
Stay tuned for more on a trend change in the dollar, which will have massive ramifications for all global markets.
Until then ….
Live and Trade With passion My Friend,
Griff