🤔To Raise Rates or Not

🤔To Raise Rates or Not - Is good economic data still good if it allows the Fed to raise rates? 🤝Debt deal passed - More debt can’t be good, right?

Who is ready for another week of trading?! After last week we are feeling very bullish, and here is what you’ll learn today 👇

  • 🤔To Raise Rates or Not - Is good economic data still good if it allows the Fed to raise rates?

  • 🤝Debt deal passed - More debt can’t be good, right?

  • 🌮Daily Menu - See the spicy stock movers, the chef's top pick, and more.

🤔To Raise Rates or Not

The sizzling U.S. job market has the Federal Reserve in a spicy situation. Should they crank up interest rates or take a salsa break? In May, nonfarm payrolls surged by 339,000, surpassing expectations, but the unemployment rate unexpectedly rose to 3.7%. Average hourly wages also increased but at a slower pace than the previous month, with annual wage growth falling short of expectations.

The job market defies the stock market recession, going strong for the whole recession. But here's the funny part: the chance of a June rate hit dropped from 70% to 30% this week despite the good economic data! Don't panic or FOMO. This market is putting pressure on the bears.

🤝Debt deal passed

Holy guacamole, the debt deal was finally passed this week! The real question on traders’ minds is whether this is good or bad for the stock market. Here is our spicy take…

Short term: Uncertainty has been removed, leading to this continuation of the bullish market.

Long-term: Printing more money can produce inflation, but don’t expect this spike to happen anytime soon.

What’s Important: The Fed is in control. Despite this news, their movement on interest rates will have a bigger pull on the markets. Since COVID, their balance sheets have been trimmed each month, which does create consistent downward pressure on the markets.

Try not to get caught up in the daily headlines, and don’t fight the FED.

How to Get the Free Trade

The “free trade” is a trick we always use scalping. This allows me to reduce our risk to zero and ride the whole move.

  1. Enter your trade with your profit and stop loss at the same time.

  2. Raise your stop loss to break even once the trade runs halfway to your profit zone.

  3. Every candle pushing higher, keep raising your stop to the prior candles low.

This is the key to riding trends, not letting winners turn red, and getting that extra guac 🥑

📈 Bulls Key Levels: Now that the channel breakout has occurred, we will target our next area of liquidity at the 438-440 gap fill

📉Bearish Key Levels: Every breakout presents an opportunity for a false break. Pushing under 420-422 would give the bears momentum to roll to the channel support @ 410

⚠️Warnings: The market has consistently sold off Monday and Tuesday while running on Thursday and Friday. Watch out for this pattern to repeat next week and prepare yourself accordingly.

Top Chart of the Week | AI 🤖

AI has been able to retrace to the 50% retracement zone after the earnings meltdown. With this stock's volatility, I expect a dead cat bounce. Not to mention AI is still a hot topic; with a bullish market, beaten names can get tasty. Full Disclaimer: We do have a position in this stock.

  • First Target: 35.00 = beginning of the gap

  • Second Target: 39.00 = full gap fill

  • Stop Loss: 29.00-30.00 under the low of last week

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