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Is Greed Back?
First, don’t miss today’s Daily Chart Setup trade idea down lower in this newsletter.
The Fear and Greed index has ramped back up out of the basement, back to the normal greed level. We are not quite to extreme greed. The put-call ratio has plummeted. These conditions might be indicative of a pullback before we go higher to push things to extreme greed.
Come join me as we dive in and see what’s moving!
Plus, as always, we have stocks popping and dropping so come find out what is moving this morning as I look for stocks and do some live premarket analysis on SPX, SPY, NDX, QQQ, Russell, IWM and other stocks that are potential plays for the day.
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No Cuts Until 2026? What Powell's Stagflation Warning Means for the Market
Fed Chair Jerome Powell just dropped a bomb — and I’m not sure the market fully gets it yet. He basically floated the idea of no rate cuts at all in 2025.
That’s not what Wall Street was expecting. But here we are, staring down the real possibility that the only “pivot” we’ll see is back up toward 5% or higher.
This isn’t just about rates. Powell brought up stagflation — the worst of both worlds — with the economy stagnating while inflation flares back up. And the FOMC seemed unified in that concern.
That should scare the hell out of anyone with capital at risk.
Why This Could Trigger the Next Big Breakdown
Liquidity is drying up again. The reverse repo facility has been drained, and we’re operating with even less cash in the system than before the Fed’s last emergency move.
That fix worked for a while, but it’s tapped out now.
We’ve built a fragile house of cards here. One wrong move — one unexpected shock — and the whole thing could come crashing down. I’m not sounding the alarm just for fun. I’ve been calling this path since last summer. I usually get the destination right.
The route? That’s always the tricky part.
Right now, we’re in the danger zone. I said it live during the FOMC stream: This looks like a five-wave decline followed by a swift, aggressive retrace.
A classic setup for a deeper move lower...
The Chart That’s Been Right Since 2022
You might remember the roadmap I drew more than two years ago — sideways chop, then a spike to new highs. That’s still playing out.
But the rally we’ve seen lately? It’s been built entirely on hopes of rate cuts. And Powell just torched those hopes.
If we really are heading toward stagflation, the Fed’s only tool is more tightening. They may not want to do it — but if inflation heats back up and employment stays artificially “strong,” they might have no choice.
The market hasn’t priced this in. Not even close. Most traders still think rate cuts are coming later this year. They’re wrong. And if Powell’s latest comments are any indication, that mistake could prove costly.
Stay perma-cautious. I’ve lightened up on risk, and I’m watching the danger levels like a hawk. Don’t get caught leaning the wrong way when this thing finally gives.
Now be sure to join me live at 9:15 a.m. ET for “Morning Monster,” my market-open livestream on YouTube!
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