We’ve only done five analogs over the years. One worked out spectacularly three were fairly accurate, and one just plain fizzled. Ideally, an analog provides exceptionally accurate forecasts of a very significant move. I think this could be one of those. For more on analogs, click here. continued for members… … continue reading →
In May 2014 many of us were shocked by a report that Ben Bernanke, who had recently departed the Fed, told a group of wealthy investors that he did “not expect the federal funds rate…to rise back to its long-term average of around 4%” in his lifetime. I remember feeling Bernanke’s statement represented both extraordinary … continue reading →
It’s great sport to criticize the Fed for what seem like bone-headed moves. Yesterday wasn’t one of them. What Powell knew and rest of us had guessed was that June CPI was headed significantly lower and would continue to widen its divergence with core CPI.While the futures were ramping higher thanks to Powell’s dovish prepared … continue reading →
Powell’s prepared remarks, released in advance of his testimony before the House Financial Services Committee, confirmed the FOMC is likely to deliver a 25 bps rate cut at the end of the month. This is what almost everybody demanded expected, so the algos have found their happy place. S&P futures, which lagged all night, are … continue reading →
Who’s in charge of ‘splaining things to the prez? Trump says he wants a cheaper dollar so the US can be more competitive in global trade. Yet, because the US is a net importer, a cheaper dollar will simply increase the cost of imported goods (just like tariffs.) The net effect will be higher inflation … continue reading →
There’s a lovely English figure of speech which suggests the ridiculousness of something happening: “when pigs fly.” In German, the same sentiment can be expressed by the expression “ich glaub mein Schwein pfeift” which means “I believe my pig whistles.” DB is surely trying, but it’s having a hell of a time whistling a happy … continue reading →
Since the market rallied 170 points on May’s dreadful 75K jobs report, should we expect it to give up those gains on June’s stellar 224K jobs report?As we approach the open, we can see that sort of logic working its way through the futures. It might not be quite as easy for the Fed to … continue reading →
When USDJPY, WTI and TNX all plunge, stock prices almost always follow suit. When they don’t, it’s usually because VIX is signaling the algos that there’s nothing to worry about. It’s no surprise, then, that the three equity breakouts (the purple, gray and white channels) we’ve seen over the past month have all been precipitated … continue reading →
The breakout fell flat, yesterday. ES might have closed 26 points off the ramp highs had VIX not performed its usual theatrics. Futures are essentially flat this morning as we await Fedspeak from Williams (centrist) and Mester (hawk.) Despite nearly unanimous expectations for a rate cut in July, most of the recent such comments have … continue reading →
The August 2018 new all-time highs lasted five weeks and, when they failed, yielded a 600-pt plunge. The May 2019 new all-time highs lasted about 6 hours and yielded a 225-pt plunge when they failed. The June 2019 new, all-time highs lasted 3 days and yielded a 51-pt decline before staging a recovery that will … continue reading →