Updates are in reverse order, meaning the latest update is just below. UPDATE: October 20, 2020 Herd Immunity: Doing the Math In June, we observed that the US had embarked on a herd immunity approach to dealing with the COVID-19 pandemic. With little public discussion or debate, the US has embarked on a herd immunity … continue reading →
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The neat little falling channel guiding stocks lower since our Oct 12 top call [see: A Cure?] has broken down – slicing right through our ES 3329 target and accelerating toward our backtest targets.Every single one of the factors responsible for driving algos higher over the past 7 months is having a very bad day. … continue reading →
Despite better than expected economic data this morning, both ES and SPX have now seen their channels from last March break down. Most of the algo factors driving them have also broken down. Unless Congress or the Fed pulls a stimulus rabbit out of their hats, things are going to get even messier going forward. … continue reading →
Futures have given up all of Friday’s rebound gains and then some, again testing the IH&S neckline and the bottom of the rising white channel from last March. At the risk of sounding dramatic, a failure of the channel would mark the end of the current rally and usher in the correction suggested by our … continue reading →
Our yield curve model is again sounding the alarm on overpriced equities. Unless the 10Y – which closed its June 8 gap this morning – declines sharply right away, the 2s10s spread signals a sharp equity correction.The bad news for equities? A sharp drop in the 10Y also portends a correction. continued for members… … continue reading →
According to Missouri Republican Roy Blunt, “If we’re going to do it this year, I think it’s now or never.” Of course, a $2 trillion package will face stiff opposition in the Republican Senate, especially with more and more senators prudently distancing themselves from President Trump. The bond market is torn on whether or not … continue reading →
For the past several months, we’ve been patiently waiting for DXY’s next leg down. Given the importance of preventing a EURUSD breakout, it seemed apparent that USD weakness would need to come courtesy of JPY strength. Today, push finally came to shove. The implications for equities are significant. continued for members… … continue reading →
Single-family home starts continued to gain from rock bottom interest rates and the exodus from urban, multifamily housing amid the pandemic. September residential starts grew 1.9%, while permits rose 5.2%, the fastest since the 2007 peak. Single-family inventory dipped to 3.3 months, the smallest since 1963, while multifamily starts cratered by 16.3%. It was a … continue reading →
Futures are higher ahead of the open on a slight increase in interest rates and the usual algo-baiting such as USDJPY’s latest bounce. continued for members… … continue reading →
September retail sales sharply beat estimates, coming in at +1.9% versus 0.8% expected. With enhanced unemployment and virtually all other stimulus having dried up, however, this could be retail’s last hurrah. But, it’s enough to boost stock prices on this OPEX Friday 2 1/2 weeks before a presidential election. continued for members… … continue reading →
Futures tagged our initial downside target overnight as markets are once again reminded that the pandemic is far from over. The shutdown headlines out of Europe won’t surprise anyone who has been watching the COVID-19 numbers. The US, which was considerably less successful in suppressing cases following the initial or second surge, is on the … continue reading →