Baffled by soaring futures in the wake of an election which ushered in gridlock? Don’t be. As we witnessed after Brexit and the US election in 2016, algos were easily driven higher by VIX and USDJPY. Last night was no exception.
USDJPY, which had dropped below its latest straw man TL, suddenly reversed and spiked higher exactly at the same time that ES dropped through its yellow channel midline. Only after ES pushed through its SMA200 did USDJPY settle back down.Likewise, VIX dumped below its horizontal resistance just in time to ensure a big, green opening. Oil futures even got in on the action, just for good measure. Following a very bearish API inventory report, CL spiked higher anyways. The net result: ES is not only higher but is accelerating higher and will easily allow SPX to gap above its SMA200 on the open. With ES’ and SPX’s 2.24s and SMA200’s behind them, is the coast clear for equities?
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