Hi YXI friends,

Today, we start with a bit of “fun” (don’t we every day?) on the most-watched IPO since COVID - SpaceX.

While trading at a pretty high valuation multiple, SPCX has managed to gather even fresher momentum on an upward trajectory after a volatile day 1.

If EWT is in play, we are pushing higher in wave iii here at the pre-market price of $211, the 1.76 extension of wave i. I expect resistance around $218 (the 200% extension), with a potential pullback/ gap fill at $192, before a wave v higher.

Kevin Warsh may be the very person who triggers a downward gap fill, as he prepares for his first FOMC press conference tomorrow afternoon. The rates market has insisted on high odds of a rate hike before the year end, despite the peace deal.

The key is whether Warsh will explicitly fight that expectation. If he comes out all dove-guns-blazing, as people expect of a Trump appointee, we could get front-end yields lower, but inflation expectations could shoot higher instead. I think he won’t do that - no Fed chair wants to corner himself on day 1. “Following the data” just like Powell, would be the prudent approach to fend off the calls from both sides.

After all, what’s the rush? There are still 6 months left in the year, and markets can change on a dime. If we get a post-Fed chair market crash or wobbles ahead of midterms, he could seize the chance to talk more dovishly, without necessarily looking biased.

DISCLAIMER: This newsletter is intended for educational purposes only. Any information or analysis in this note does not constitute an offer to sell or a solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice, nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.

Please check out our glossary for explaining the acronyms, financial terminology, and economic data.