Flirting With Danger

The Trump Rally never made sense to me [see: Why the “Trump Rally” is a Fraud.]  Yet, breakouts are breakouts, even if they’re driven by algo trickery and trend followers. SPX’s breakout in November was driven by exuberant spikes in USDJPY, DX and WTI and a historic suppression in VIX, which is at a crossroads.  … continue reading →

All About the Dollar

Today, it’s all about the USD.  EURUSD continues toward our upside target, while USDJPY is pedaling as fast as it can to compensate.  As we’ve discussed all week, this leaves DXY at long-term critical support.Thanks to VIX and USDJPY, equities were able to put on quite a show yesterday, rallying back above support as expected. … continue reading →

Is it Safe?

Two weeks ago I floated the idea that the USD, which had broken down below a long-term trend line and bounced, wasn’t done [see: The Rally That VIX Built.]  While the effects on equities would likely be muted by drops in VIX and a rise in oil prices, currencies were in for some significant moves. … continue reading →

Fundamentally Speaking…

SPX was locked in a nice, neat falling channel last week until Friday morning when, after backtesting the top of our yellow channel for the eleventy billionth time, two fairly common things happened:  a rising channel for VIX suddenly broke down… …and, USDJPY “broke out” of the falling channel it’s been in since Dec 8. … continue reading →

What, Me Nervous?

After EIA’s modestly bullish inventory report came out, yesterday, WTI dithered for a moment before heading higher.  I was prepared to throw in the towel on our 42.11 downside target when its rally reversed at the exact price it needed to in order for me to quickly regain my confidence. The yellow arrow marks the … continue reading →