By now, most members are well-versed in the important role USDJPY plays in propping up equities. In fact, the yen carry trade is alive and well, and continues to rescue stocks on a daily basis. In our last dedicated update in July USDJPY [see: USDJPY Reaches Critical Resistance] I noted that the pair had backtested … continue reading →
It was an unusually strange quarter in an unusually strange year. Somehow, we got through it. But, it wasn’t all that fun to trade. The past few days were a great case in point: strong ramp job into the FOMC announcement, followed by an even sharper spike, followed by the rug being pulled out from … continue reading →
It was a strange press conference. As we discussed yesterday, stocks would react kindly… …if Powell is successful in convincing investors algos that the economy is strong but there is no wage pressure and inflation poses no real threat. I think he succeeded in portraying the economy as strong. This morning’s economic data helped bolster that narrative … continue reading →
Over the last 20 years, we’ve seen two yield curve (2s10s) inversions: essentially all of 2000 and Dec 2005-May 2007. The inversions themselves posed no issues for equity markets. It was the dramatic unwinding of those inversions that produced crashes.Eight months ago, we almost had another. 2s10s had fallen to a trend line connecting those … continue reading →
After bouncing off our initial downside target yesterday, stocks ramped nicely into the close and overnight. But, the overnight ramp job is fading fast, and it remains to be seen whether the backtest scheduled for the opening bell will hold. The focus over the next couple of days is, of course, the Fed. There is … continue reading →
The trade dispute is officially a trade war. You’d never know it from looking at the stock market. The bond market, however, is a different story. Tariffs will clearly add to inflationary pressures. But, even before the “trade wars are good, and easy to win” gaffe, the Fed and a bevy of inflationary economic reports … continue reading →
We’re off to a quiet start so far, with futures up a few points in sympathy to rising oil and gas prices — both up over 1% — and, a bounce in the dollar index. OPEC is slated to meet over the weekend, and it’s not unusual to see oil rally in advance of a … continue reading →
Yesterday was all about fine tuning, positioning SPX/ES for a breakout — which arrived at 2am courtesy of the breakdown in VIX we were expecting. Is the start of another prolonged period of VIX bashing? And why now? Has it anything to do with DXY finally breaking down? continued for members… … continue reading →
ES reached new highs yesterday, but SPX reversed at its .886 Fib retracement. Which should we believe? Since VIX is plunging in the minutes before the open, indications are that this morning’s selloff will be just enough for SPX to flesh out its latest rising channel — also on the way to new highs. What … continue reading →
Catch this news flash yesterday? Trump, ironically at a White House meeting with the National Council for the American Worker: You’re gonna see on China, today, right after close of business…we’ll be announcing something, uh, and it will be a lot of money coming into the coffers of the United States of America, a lot … continue reading →