Trading Plan – Monday 10th October 2022: Confirmation bias hits macro reality

Mark NugentOctober 2022, Trading Plan

Trading Plan – Monday 10th October 2022: Confirmation bias hits macro reality

Good morning.

Last week was all about the possibility of a Fed pivot. That is, the moving away from equity-flattening rate hiking to something more moderate, triggered by signs the economy is being pushed into or close to recession.

So, early in the week, along comes the JOLTS Job Openings survey. Never heard of it? Join the party. It’s a Tier III event. You don’t get out of bed for Tier III events. The survey showed a tightening of the labour market. Confirmation bias anyone? Equities rose for two days then the macro reality hit. On Friday we had the September Unemployment Rate in the US. It came in under economists’ estimates and showed, again, the astonishing resilience of the US labour market. Now, without looming recession and hence a reason to hope the Fed would pivot, equities sank.

I am slightly ashamed to say I traded the Japan225 profitably in both directions. I had reasons. Some of them were good. There’s more info in the video. Total gain was around 2.75 percent.

This week is a bit sparse on the economic calendar. The highlight is US Core CPI on Thursday. Now that could be a trigger for a pivot. No confirmation bias required.

As always, I go through my trading themes for the week in the video.

I’ll be back tomorrow.

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