Icahn: We Absolutely Have A MAJOR Problem

Moody’s ranked the entire American banking system as negative yesterday.

Yet the Dow was up more than 1%… and the tech-heavy NASDAQ was up more than double that.

It sure doesn’t seem like a collapse.

Regional banks were also coming back strong, with First Republic on an absolute rampage, gaining almost 27%.

My read… the stakes are simply getting higher.

The federal government is backing the American banking sector to the hilt. The feds have successfully soothed an entire industry that was on the brink of panic by removing one of the major elements of risk.

Yet the problems of spiraling debt, shaky consumer confidence, persistent inflation, and rising interest rates remain.

Not to mention the geopolitical challenge to American hegemony.

In other words, something may give.

Notice I said something may give. It’s not that something has to give.

For my entire life, people have been saying that the rising federal deficit means that the system will “collapse.”

It hasn’t.

Even things that shouldn’t be able to go on forever often go on for an incredibly long time.

That’s why it’s important to trust your tools, reach out to your team, and don’t ever trade based on emotion.

Keep Moving,

GET IT DONE

Mr. X’s motto – and since the beginning of Rogue Investing Daily…

He’s been giving picks with returns of 390% in under a year…
442% in less than a month…
and 1,154% in 16 months…and urging subscribers to hold back from any new crypto investments right before the crypto bear market.

NOW FIND OUT ABOUT THE “TRADE OF THE DECADE”

A “Buy and Forget It” Trade For the Long Haul

COACH’S CORNER

“Yesterday I mentioned that when an index like SPX falls off a cliff, be on the lookout for a rebound. We got that today. Though this may not be the start of a proper rally, I’m confident it wiped out quite a few put buyers this morning on the pop.”

“Though today’s price action was a bit better than Monday, there doesn’t seem to be much conviction behind the bullishness. I would be surprised to see more downside tomorrow. My technical indicators aren’t screaming “GO LONG,” and the recent bank failures have truly spooked investors.”

“As for SPX, I didn’t hold anything overnight for the cash session. However, I don’t know what will happen, so I plan to trade futures this morning…I’ll just see what the market has in store after the open.”

“For those interested in shorting, there may be an excellent opportunity to catch XLF as it drops a bit further. Look at the daily chart of XLF above:”

“We did see a bounce yesterday, but you’ll notice the candle is orange rather than green. One of my indicators flagged this as a “divergent high.” These mean that there’s an 85% chance we’ll see lower prices within the next three candles. That, coupled with the overhead resistance, may mean a further drop to support at $30.55. ”

“So keep this on your bearish watchlist and hopefully you can earn back some of that money the banks have taken from you.”

Cheers,
Chris Hood

WORD ON THE STREET

Moody’s Slashes Bank Rating, Icahn Warning, Dow Surges

“Rapidly Deteriorating Operating Environment” – Moody’s Investors Service downgraded the US banking system in response to recent bank failures. “We have changed to negative from stable our outlook on the US banking system to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY,” it said. Though it acknowledged recent actions to safeguard the sector, it said “banks with substantial unrealized securities losses and with non-retail and uninsured US depositors may still be more sensitive depositor competition or ultimate flight, with adverse effects on funding, liquidity, earnings and capital.
No Surprises On CPI Report – The Consumer Price Index reported that inflation was up 0.4% last month, 6% year-over-year. That was right on the money when it came to expectations.”

Odds are strongly favoring another 0.25% rate increase in the benchmark federal funds rate

“We Absolutely Have A Major Problem” – Financier Carl Icahn sounded a warning on the overall health of the American economy. “The system is breaking down, and we absolutely have a major problem in our economy today,” he said. “One of the worst countries in the world as far as corporate governance.” He added that the Federal Reserve has no choice but to keep raising interest rates in order to fight inflation.
Dow Breaks 5-Day Losing Streak – The Dow Jones Industrial Average gained 1.06% and the NASDAQ composite was up 2.14% yesterday. Investors concluded that the federal government had successfully contained the crisis in the banking sector, with regional banks like First Republic Bank up big.

HOT SPOTS: What’s Going on in Geopolitics

Putin Dismisses Claims Ukrainians Blew Up Nord Stream Pipeline, Hints At US Role – President Vladimir Putin dismissed allegations from American intelligence that Ukraine or Ukranian partisans were responsible for destroying the Nord Stream gas pipeline. He called it “sheer nonsense.” “Such an explosion, so powerful and at such depth, could only be conducted by experts back by the entire potential of a state that has relevant technologies,” he said.
Russian Jet, American Drone Collide – The American and Russian militaries have dueling stories about the fate of a MQ-9 drone that the U.S. claims was flying in international waters. The U.S. claimed Su-27 fighters dumped fuel on the fighter in an “unprofessional” manner. Russia claimed that the drone’s behavior constituted a provocation.
Honduras Switches Ties To China – The number of nations that recognize Taiwan via formal diplomatic relations is about to be reduced by one. Honduras is seeking formal diplomatic ties with the People’s Republic of China, which means it has to end ties with Taiwan. President Xiomara Castro called it a “sign of my determination to fulfil the government plan and expand borders.”

CUTTING EDGE: What‘s Happening In Tech

Microsoft Lays Off Ethics Team On AI – Even as Microsoft goes big on AI, it still needs to cut expenses. The latest victims – a team that investigated ways AI could lead to ethnical outcomes. Platformer reports that pressure from corporate leaders led the team to be cut, as MSFT is eager to roll out OpenAI’s models and get them into customers’ hands quickly.
Musk Agrees That Instagram Is “Dead”– Meta Platforms is facing tough times as the company undergoes repeated layoffs. Elon Musk is piling on. In response to a Tweet that alleged “Instagram is dead” because images will be created by AI, Elon Musk responded, “Yup.”
Machines Officially Better Than Us At Standardized Tests – OpenAI’s new large language model GPT-4 reportedly beats 90% of humans on standardized tests. However, the model reportedly still has a problem with what the experts call “hallucination.” In other words, when it is confused, it simply makes things up. That’s rather endearingly human.

The new model will soon be available to paid ChatGPT subscribers

“My most profitable trades have recently used the 5-12 minute time frames. Short scalping trades on choppy days and longer intra-day trends when there’s a clear direction.”

The market is banking on a change of course from the Fed. That may not happen – and traders could find themselves financially devastated by mistaken assumptions.

Chris Hood outlines the absolute rules you’ll need to stay protected during this volatile time.

SEIZE THE DAY

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Icahn: We Absolutely Have A MAJOR Problem

WORD ON THE STREET

Moody’s Slashes Bank Rating, Icahn Warning, Dow Surges

No Surprises On CPI Report – The Consumer Price Index reported that inflation was up 0.4% last month, 6% year-over-year. That was right on the money when it came to expectations.”

HOT SPOTS: What’s Going on in Geopolitics

CUTTING EDGE: What‘s Happening In Tech

Musk Agrees That Instagram Is “Dead”– Meta Platforms is facing tough times as the company undergoes repeated layoffs. Elon Musk is piling on. In response to a Tweet that alleged “Instagram is dead” because images will be created by AI, Elon Musk responded, “Yup.”

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