IMPORTANT DISCLAIMER: I am NOT a registered investment adviser, broker dealer, or member of any other association for research providers in any jurisdiction whatsoever & I am NOT qualified to give financial advice. Investing/Trading in securities, particularly microcap securities, is highly speculative & carries an extremely high degree of risk. The information, analysis, & opinions listed above are my own & may not properly reflect the underlying conditions of a company or security. You should do your own Due Diligence. Past performance does not guarantee future results. If you trade based on anything I have written YOU ACCEPT FULL RESPONSIBILITY AND LIABILITY for your own trades & actions & hold the author of this publication harmless. If that isn’t clear enough DO NOT TRADE, ACT, OR INVEST, BASED UPON ANYTHING I WRITE OR RECOMMEND. There, we should be solid now.

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I am still waiting for substack to reach out to me on the billing fix. It seems since I temporarily paused billing they’re having trouble restarting it. They tell me their engineers are working on it. Once things are fixed I can get back to business as usual and see about lowering the price of the overall newsletter. As a result of this setback I have revised the newsletter as you all remember it.

Before you Trade Today: Know the Economic Calendar! Also See This Weeks Most Anticipated Earnings. NEVER BE SURPRISED BY EASILY ANTICIPATED MARKET BREAKING NEWS. That’s our goal here.

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BUILDING PERMITS & HOUSING STARTS TODAY: Consensus Housing Starts are 1.54m while consensus building permits are 1.64m. 1.54m housing starts would take us back to the same number in early 2021 & well under the rate we had right before the pandemic. Building permits however still remain well above pre-pandemic numbers, though 1.64m is a decrease from the month prior.

I think its important to remember that some of the post-covid rally was due in part to low interest cash out refinancing. Folks with a large amount of equity in their homes were able to not only refinance at a lower rate, but also pocket some of the cash to get by. As home prices plummet & interest rates rise, this will become less of a phenomena. Indeed it already is. Moreover, those pandemic low interest rates incentivized many folks into homebuying. With homebuying comes additional expenses & a commitment that can often take more money out of peoples pockets; money that they would otherwise save or spend elsewhere. Also anyone who purchases a house in today’s market risks being underwater on their mortgage as demand declines. It is for these reasons, among others, it’s important to pay attention to the housing market.

BEAR HEADLINES ARE STARTING TO SHOW: I’m seeing some major sentiment changes in the headlines. Makes sense, bear markets generally have the largest rallies & I don’t see anything that changes the underlying bearish economic conditions that would justify such a rally in the first place. Nevertheless folks get excited when it seems that the numbers are going their way, shorts cover, & firms sitting on cash have to put it somewhere. However, if I were to guess, I’d say this rally will be short lived. Don’t take that to the bank, but as indicated earlier, I don’t see a justification for this rally. Lets see how the housing, retail spending, & retail earnings play out. Therein is where the uncertainty lies. And folks … the Fed … don’t forget the Fed! Quantitative tightening & rising interest rates may not seem like they’re having an effect now … but they will. They always do!

INFLATION CONTINUES … NO MATTER WHAT FOLKS TELL YOU: Yes, energy prices are lower. But core inflation continues to rise. Food prices are also rising. Don’t let the optimism of one declining sector distract you from the overall trend. And remember, the pain starts when the rate of price increases start to decline, (meaning demand destruction) not necessarily when they’re booming. Look for that demand destruction in this weeks retail earnings. Indeed it may be the case that expectations are so low that retail stocks rally regardless of earnings, but we nevertheless should not ignore the signals that retailers are sending!

RETAIL SALES THIS WEEK: Retail Sales MoM for July will be reported Wednesday this week together with FOMC minutes & housing data. Consensus retail sales are expected to come in at an increase of 0.1% MoM. That’s not a great number, & its a sure fire indicator that people have adjusted their spending habits to cope with inflation. Now, if this number comes in negative it will rock the markets! This is the number you will want to pay attention to this week.

FOMC MINUTES: I don’t suspect any surprises here unless the big money in the market wants to use it as a negative catalyst. We know the Fed wants to increase rates until they see a noticeable & reliable shift on inflation. We also know that the recent decrease in month to month YoY inflation is not enough to give the Fed a warm & fuzzy.

POWW Update: Many of you remember I terminated my position in Ammo Inc. as a result of the indicators provided last earnings call. It seems to me those indicators came to fruition during their earnings yesterday, although I’m still scratching my head as to how it pumped to this point all the same.

WORLD MARKETS:

• Stock futures flat after notching gains Monday

• European markets nudge higher, looking to build momentum

• Asia-Pacific markets mixed as BHP, Chinese real estate shares soared against weak Japanese trade

RECOMMENDED:

• Asia’s inflation has peaked compared with major economies in other regions, Morgan Stanley says

• The summer rally has been very bullish, but strategists say a big sell-off next month is possible

• Michael Burry of ‘The Big Short’ dumps all of his previous stock holdings and adds just one name

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TODAY’S EPS EXPECTATIONS: