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US stock market sentiment is heating up — but not overheated yet
• AAII bullish sentiment just jumped from 35.1% to 45% — a sign of growing optimism as the S&P 500 hits new highs.
• However, it's not yet in "frothy" territory, which starts above 50%. Last July, a 52.7% reading preceded a 9% market drop.
• For now, positioning doesn’t look overcrowded — but if bullish sentiment pushes past 52%, caution is warranted.
• Key question: can the S&P 500 hit 6500 or even 7000 before sentiment overheats?
JUST IN: EU diplomats report a lack of progress in US trade negotiations, with talks set to continue into the weekend.
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Wyckoff Method: Core Principles in Brief
The Wyckoff Method helps identify big players’ actions through price and volume analysis. It focuses on accumulation (buying quietly) and distribution (selling quietly) phases to predict future price moves.
3 Wyckoff Laws:
• Supply & Demand: Price rises when demand > supply.
• Cause & Effect: The longer the consolidation, the bigger the breakout.
• Effort vs. Result: If volume is high but price doesn’t move — a reversal may be coming.
Strategy in 5 Steps:
1. Define the market trend (up/down/sideways).
2. Pick strong stocks in uptrends, weak in downtrends.
3. Use consolidation range (P&F charts) to set price targets.
4. Confirm if stock is ready to move (breakout/breakdown).
5. Time entries with overall market turns.
Goal: Follow smart money and enter before the real move starts.
Stock Options & Covered Calls: A Simple Breakdown
Options are contracts that give you the right—but not the obligation—to buy (call) or sell (put) a stock at a fixed price by a certain date. They’re flexible, low-cost tools used for speculation, hedging, and income—but they carry higher risk than regular stocks.
One lower-risk approach is the covered call strategy, where you:
• Own the stock
• Sell a call option on it at a higher strike price
• Collect a premium for short-term income
• Gain limited downside protection
3 Outcomes of Covered Calls:
1. Price rises → You profit from the premium, but the stock may be sold at the strike price.
2. Price drops → The premium cushions some loss.
3. Price stays flat → You keep the premium as profit.
Covered calls are ideal when you’re neutral to mildly bullish on a stock’s near-term outlook.
Why Most Traders Lose Money: It’s All About Risk
Capital destruction isn’t just about a losing streak — it’s about poor risk management. Even with a 50% win rate, large position sizes can wipe you out.
Here’s the math:
• Lose 10% → need 11% gain to recover
• Lose 20% → need 25% gain
• Lose 50% → need 100% gain
• Risk 1% per trade → down 10% after 10 losses
• Risk 5% → down 50% in the same scenario
It’s not your win rate — it’s your position sizing that often kills your account. Survival in trading depends on how well you manage risk, not how often you’re right.
Protect your capital. Small losses are recoverable — big ones aren’t.
Risk/Reward: The Core of Profitable Trading
• Risk/reward ratio shows how much you’re risking vs. potential gain. A solid setup usually offers at least 1:2 or 1:3.
• Risk = stop-loss level where trade is invalidated.
• Reward = target where price is likely to go if the trade works.
• The higher the reward vs. risk, the lower your win rate needs to be to stay profitable.
• Trailing stops help capture bigger moves, but you won’t exit at the peak.
• Be impatient with losers, and patient with winners.
• Example: Buy 100 shares at $100, stop-loss at $97, target at $109:
• Risk = $300, Reward = $900 → 1:3 ratio
• Break-even win rate = 25%
Mastering risk/reward is essential — cut losses quickly, let profits run.
JUST IN: Bessent anticipates numerous trade agreements before July 9.
• About 100 countries are expected to implement a minimum 10% reciprocal tariff.
• Several deals will be announced.
• The market is indicating potential Federal Reserve rate cuts.
The anticipation of trade deals and rate cuts could positively influence market sentiment, leading to increased investment and potentially higher valuations.Читать полностью…
JUST IN: Bessent: Tariffs might cause a temporary price increase.
• More trade deals are expected.
• Countries should be cautious as rates could return to the April 2 level.
• Discussions are planned with the EU.
• Job data can fluctuate monthly, but the overall trend is positive.
• It's the Fed's responsibility to set rates.
• If there's no Fed rate cut now, a larger cut might happen in September.
These insights could influence market expectations regarding future trade agreements and potential rate cuts, impacting financial market sentiment and investment strategy.Читать полностью…
Trading Journal Cheat Sheet
A trading journal is a tool for self-awareness. It helps identify psychological mistakes and improve discipline.
Why keep a journal:
• Trading is mostly psychological.
• A journal reveals recurring errors and helps fix them.
• No analysis = no progress.
What to log for each trade:
1. Entry signal and reasoning
2. Emotions at entry
3. Position size and stop-loss
4. Profit target or exit strategy
5. Emotions at exit
6. Execution mistakes and lessons learned
7. Confidence in yourself and the system
8. Stress level throughout the trade
What to track:
• Position sizing
• Risk/reward ratio
• Win rate and profit factor
• Size of winners and losers
• Best setups and time of day
Takeaway:
Journaling isn’t about perfect trades — it’s about consistent execution. Measure, analyze, improve.
US Macro Data:
• Nonfarm Payrolls (June): 147K (forecast: 100K / previous: 139K)
• Unemployment Rate (June): 4.1% (forecast: 4.2% / previous: 4.2%)
• Initial Jobless Claims: 233K (forecast: 240K / previous: 236K)
U.S. Federal Housing regulator urges Congress to launch an investigation into Fed Chair Jerome Powell.
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US Housing Is the Least Affordable in 35 Years
Affording a home has never been tougher:
– Median earners now spend nearly 40% of their income on mortgage, taxes, and insurance
– The historical average? Just 29%
– In the 2008 crash, it dipped to 22%
For housing to rebound:
→ Home prices need to fall ~15%
→ Mortgage rates need to drop ~1.5%
Until then, the market stays frozen.
Linda Raschke’s 12 Timeless Trading Rules (Condensed)
Market Wizard Linda Raschke distilled decades of experience into these core principles:
1. Buy the first pullback after a new high, sell first rally after a new low.
2. Morning reversals are stronger than afternoon ones.
3. Big gaps often lead to trends.
4. Watch how price acts around previous day’s high/low — key pivot zones.
5. First and last trading hours reveal the day’s strength.
6. High volume into close = likely continuation next day.
7. First hour’s range sets the tone — trade early if trend is clear.
8. Four timeless principles:
• Trends are more likely to continue than reverse
• Momentum leads price
• Trends end with climaxes
• Markets alternate between range and breakout
9. Nobody knows the future — trade what is, not what might be.
Reactive > Predictive.
JUST IN: The possibility of a Fed rate cut in July is considered unlikely, but recent weak payroll data has increased speculation.
• Allspring’s Michael Bird mentions a July rate cut is improbable without significant negative data.
• Futures markets currently estimate a 25% chance of a July cut after weak ADP payroll data.
This shift in expectations could lead to increased market volatility as investors react to changing forecasts for Fed policy.Читать полностью…
Serious loan delinquencies on the rise across all sectors
U.S. consumers are falling behind on debt — with 90+ day delinquencies climbing in nearly every major category:
— Mortgages
— Home equity credit lines
— Auto loans
— Credit cards
— Student loans
The broad-based increase signals growing financial strain despite a strong labor market and resilient economy.
JUST IN: Elon Musk suggests that Independence Day could be an ideal moment to consider establishing a new "America Party." He questions if people would support a third party that competes with both Republicans and Democrats.
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India cracks down on Jane Street’s billion-dollar expiry game
Two hours ago, Indian regulators froze $5 billion of Jane Street’s profits and effectively kicked them out of the market. The reason: an aggressive expiry-week strategy that finally crossed the line.
Here’s how it worked (around day 15–18 before index expiry):
⚪️In the morning, they’d aggressively buy BankNifty components on both the cash and futures markets.
⚪️This would trigger a signal on the options market — other players see the index rising.
⚪️Meanwhile, Jane Street would sell calls and buy puts on the more liquid options side, which hadn’t caught up yet.
⚪️After noon, they’d dump the cash and futures positions, dragging the index back down and profiting from the puts.
A classic pump-and-dump — just done with billions in working capital.
They got caught because the losses were too consistent. They lost money every day on cash, futures, and index futures — except expiry day, when the real profit came from the options.
Most Profitable Chart Patterns
1. High & Tight Bull Flag
• Price doubles (or +90%) in ≤2 months, then forms a tight pullback
• Breakout above the flag signals continuation
• Target = size of the prior move
• Best used with tight stop and trailing exit
2. Complex Head & Shoulders Top
• 4–6 peaks after an uptrend, with multiple heads or shoulders
• Breakdown below neckline confirms reversal
• Target = height from head to neckline
• Volume confirms: fades on rallies, rises on drops
Both patterns work best with solid risk/reward and clear trade management.
5 Money Habits That Keep People Broke — According to Warren Buffett
1. Buying New Cars
New cars lose value fast. Buffett drove a 2006 Cadillac for nearly a decade. Reliable used cars save thousands — money better invested.
2. High-Interest Debt
Credit cards drain wealth. “If you buy things you don’t need, soon you’ll have to sell things you need.” Avoid debt, invest instead.
3. Gambling & Lotteries
Buffett calls them a “tax on people who don’t understand math.” The odds are against you. Long-term wealth comes from patience, not luck.
4. Trying to Impress Others
Buffett still lives in the same modest home. Spending for status is a financial trap. Real wealth doesn’t need to show off.
5. Eating Out Too Often
He prefers simple meals like McDonald’s. Constant dining out eats into savings. Cooking at home builds both health and financial security.
Foreign Investors Are Pulling Back From U.S. Stocks
• Overseas investors withdrew ~$5B from U.S. equity ETFs in June — the largest outflow in 3+ years.
• This comes after ~$5B in net inflows during May and ~$24B in November 2024 alone.
• The pullback happens despite the S&P 500 rallying +5% and hitting new all-time highs.
Global capital is quietly rotating away from U.S. equities.
The S&P 500 hits a fresh record after a better-than-expected June jobs report.
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The 10Y Note Yield surges to 4.36% after the June jobs report crushes expectations.
While the unemployment rate was expected to rise to 4.3%, it FELL to 4.1%.
The bond market thinks Powell has even more of a reason to not cut rates here.
UK markets rebounded after PM Starmer confirmed Rachel Reeves will stay Chancellor long-term.
• 10-year gilt yields fell 6 bps to 4.55%.
• 30-year gilt yields dropped 7 bps to 5.35%.
Trump’s Vietnam Tariffs Might Actually Help China
Trump’s new deal slaps a 20% tariff on Vietnamese imports — harsher than the current 10%, but better than the threatened 46%. It aims to stop China from bypassing U.S. tariffs via Vietnam. But there’s a catch.
China isn’t just trans-shipping goods. It’s using origin washing — sending raw materials to Vietnam, turning them into finished products (like clothes or electronics), and exporting them as “Made in Vietnam.” That dodges China-specific tariffs entirely.
Firms like BYD already shifted production to Vietnam years ago, anticipating this exact outcome. So while Trump’s deal looks tough on paper, China’s been preparing for it — and is already playing by the new rules.
Orange juice futures prices have plunged to their lowest level.
After a historic peak in late 2023 — driven by drought, citrus diseases, and poor harvests in Florida and Brazil — the market is now rapidly correcting downward.
During the COVID‑19 pandemic, demand also pushed prices up, but the current drop reflects a recovery in supply and easing of shortages.
Samurai Bonds Are Back in Demand
U.S. companies are increasingly issuing yen-denominated Samurai bonds to tap into Japan’s cheaper capital.
Why?
– High U.S. rates make domestic borrowing expensive
– Tight JPY-USD cross-currency basis lowers the cost of converting yen to dollars
– Samurai bonds let firms borrow more cheaply and diversify investors
With favorable funding conditions in Japan, expect more U.S. corporates to follow this route.
UK Bond Yields Surge as Fiscal Concerns Hammer the Pound
The British pound dropped over 1 cent in an hour as markets react to a sharp selloff in UK bonds.
• 30-year gilt yields spiked +21 bps to 5.44%
• 10-year yields rose +20 bps, 2-year +9.6 bps
Rumors swirl around Chancellor Rachel Reeves after her emotional U-turn on welfare cuts. Investors are rattled by signs the UK government may be pulling back from fiscal discipline.
Americans Are Quitting Jobs at the Slowest Pace Since 2020
The number of people voluntarily leaving their jobs dropped by 151,000 in May, hitting the lowest level since November 2020.
Job leavers now make up just 9.8% of total employment, down 4 percentage points over the last 6 months — a rare decline outside of recessions.