[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] The S&P 500 is on fire, rallying for eight straight days and soaring over 9.5% since the August 5 low. While some might shrug off this rollercoaster of a market as just another day on Wall Street, don’t be fooled—this is anything but business as usual. The VIX, which spiked to a staggering 65, has made a jaw-dropping U-turn, plummeting to 14 without even pausing for the typical breather around 20. If this wild ride continues, the pressure on short-sellers will only intensify, with high-beta stocks leading the charge. Today, oil tried to steal the spotlight, but it was technology and cyclicals that ended up dominating the day, with only three sectors outshining the S&P 500. And guess what? Those top performers are the highest beta players in the game. Buckle up as we take a closer look at the

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] The market was deadsville coming into the close – completely boring. In fact, it was like that for most of the day today! Volume, trade, volatility – all were on the low side. If I didn’t know any better, I’d say the market more or less exhausted itself with the fireworks this week. But here’s the thing: Volatility doesn’t just disappear. When you zoom into the tape, you can see the violence is still there. I’ll show you how. After all, there is such a thing as upside volatility. The market is beginning to fixate on the idea of the “Goldilocks market,” where inflation, unemployment, and growth are all juuuuust right. You’re going to hear a lot about that in the week ahead I think. But I’m going to show you how this market is, at best, one iffy economic

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] Traders got the good (or, at least, not completely terrible) jobs and retail numbers they’ve been craving, as data came in more or less in-line with expectations. So why am I inclined to bet against the consumer or, to put a finer point on it, the consumer’s discretionary spending? After all that’d seem counterintuitive right now… But here’s the thing… between the lines of this data, we’ve got rising weekly jobless claims and record-high consumer debt. Moreover, that “strong and rising retail spending” is mostly spending on consumer staples. And a huge chunk of that spending is on credit cards. Here’s what I suggest we do about it…

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] I know what you’re thinking, and no, we’re not out of the woods. We’re still under the influence of volatility, so consider any rally a rip-your-face-off rally until proven otherwise. The risk/reward picture still favors downside – heavy downside. Now, I can hear you saying, “But Doooon – what about CPI today?” Well, you’d think we’d have had just such a rally – there was actually a 52-point expected move – but the most anticipated data dump in weeks turned out to be a bit of a dud. Look, markets love to watch the birdie – they fixate on one thing, then another, and another. Inflation was the shiny object for months – years, even – but now everyone can see it’s coming down. Slowly but surely, it’s coming down. Now traders are looking to live or die on a

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] It might feel like the Japanese yen carry trade blew up 100 years ago, but trust me – it’s only been a week or so since the dam broke. If it feels longer than that, it’s because stocks have managed to squeeze much higher from last week’s yen-induced lows; short-sighted traders have already forgotten. This near-term amnesia remains a potential catalyst for another downside reversal. So does tomorrow’s CPI report. That’s not to say another selloff is guaranteed – the bears are playing defense now and the longer this rally goes on, the greater the likelihood the recent selloff will stay in the rearview mirror. We’re certainly seeing leadership from the right sectors – take a look…

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] The market is convinced the Fed is satisfied with its inflation effort and is preparing to cut interest rates. We’ll gauge the reality of those expectations this week with a heat check on PPI and CPI data. The “$64,000 Dollar Question” is: How is the market positioned? If today’s action is any indication, it’s positioned for stagflation. Commodity strength, particularly gold leadership, and a softer, negative tone from other more cyclical sectors is showing. We saw tech strength, it’s true, but otherwise the dismal performance of real estate, telecom, and financials screams stagflation. Don’t let that tech performance get you too excited; it’s reached its 61.8% Fibo retracement area. It could get a lot harder from here. This week, I’m listening for the dollar to start to tell a story – whether it strengthens or weakens will determine what that

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] The market has been a rollercoaster lately, with the resilience of defensive sectors and the modest bounce in the technology sector painting an intriguing picture. This movement hints at a temporary adjustment rather than a full-blown recovery. The VIX, still holding strong above 22, reinforces this idea and suggests we might be on the verge of another significant move upward. Amidst this market dance, key economic indicators like weekly unemployment claims and bond auctions are flashing warning signs, pointing to underlying weaknesses in the economy. Stocks haven’t quite made up their five-day losses yet, but Friday will tell the tale. At the moment, it looks like a rally could be in the making – maybe, maybe not But here’s where I think smart traders should be looking…

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] Sure, the VIX is down from the other day’s damn near historic high above 65. But it’s still more than double what it was just a month ago. Then again, there’s more than one way to measure volatility. And it’s not like volatility is a bad thing, at least if you’re ready for it – it helped bag my subscribers a 30% one-day gain in META. Stocks have to move to make money, right? They’re certainly moving today. As I write this, about 30 minutes ahead of today’s close, I’m sure there are folks out there who can’t wait for the closing bell to ring. I’m looking at a monster reversal in the S&P 500 – a more than 100-point reversal on the day. The NASDAQ is seeing 500- and 600-point reversals. Absolutely this is causing anxiety, maybe even panic,

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] Well, it’s finally happened. I’ve been warning for months – since it was cooler outside – that the carry trade in increasingly expensive Japanese yen was likely to blow the markets apart. And wouldn’t you know it… the mad traders’ rush to unwind their suddenly-expensive yen carry trades has at last blown the markets apart. Of course, it feels much better being right and protected, and if you’ve been following along with me, I’m sure it’s the same for you. I came into this week heavily in cash. In fact, the big cash position even gave me the peace of mind to make some strategic buys amid the frantic selling yesterday. That said, it’s likely this rout has a few more innings left to run; I don’t think the bottom is in, regardless of today’s bounce. But our healthy cash