It’s not unusual to see a very deep, extended backtest prior to a selloff. In the old days, we would attribute this to malevolent market makers who wanted to flush out weak shorts before cashing in. The same thing happens these days, though it is typically perpetrated by algorithms and HFTs. As we discussed yesterday, … continue reading →
Futures are flat as we approach the open, off from their overnight highs as VIX crept back above its SMA10 moments ago. At least the sharp rebound answered the question we had regarding the timing of this correction. continued for members… … continue reading →
In our last update [see: May 19 Update] we noted that BTC had reached our downside target of 30,108 months ahead of schedule and was due for a rebound. The bigger picture indicates we should see a reversal here with at least a backtest of the SMA200 at 39,800ish. As it turned out, BTC backtested … continue reading →
ES tagged our first downside target two sessions ahead of schedule yesterday. As my good friend (and brilliant trader) Ed put it… All of our charts remain on track. The algos are trying to make up their “minds.” Is this one of those quick plunges which will be followed by an even quicker recovery, or … continue reading →
We’re seeing a nice start to the correction we forecast last week. We’ve reached our next downside target in the 10Y, which seems to finally have attracted attention from the algos. Remember, there’s still a gap to fill at 1.20%. As expected, USDJPY, CL and RB have rolled over and broken down – leaving futures … continue reading →
Another overnight session of VIX being hammered back below the SMA10 and melting up futures… Will it ever end? ES spent hours bouncing at its SMA10 yesterday, finally breaking down – perhaps as carbon-based investors began contemplating the Fed’s dilemma. But, no surprise, VIX cratered into the close and got ES back above its SMA10 … continue reading →
I’ve recently discussed this very issue with several friends who are a little nervous about the sharp runup in prices…and very nervous about the prospect of a selloff. Most of us remember how ugly things got during the Great Financial Crisis: the sharp rise and the much sharper plunge when the bubble burst. According to … continue reading →
No one laid a glove on Powell during his House testimony yesterday. His assertions regarding inflation and economic growth went largely unchallenged. In fact, 10Y yields are off this morning, testing 1.32 moments ago.Can he continue to fool most of the people most of the time? It’s worked out pretty well so far, with plenty … continue reading →
Powell’s testimony to the House today should be informative, but it usually isn’t. By now he’s learned that it just doesn’t pay to be honest and forthright about what’s happening in the economy (e.g. “inflation isn’t a problem.”) Wouldn’t it be nice if someone called him on it, asking him how exactly spiraling inflation is … continue reading →
If you’re wondering what the noise was, it was the Fed’s “transitory” explanation doing a big fat face plant after June’s inflation data were released. Headline annual CPI came in at 5.4%, the highest print since June 2008 and the second highest since Nov 1990. The 0.9% MoM print (headline and core) was also the … continue reading →