The spread between the 10-yr and 2-yr has now narrowed to 50 bps — the same level it was when stocks peaked in October 2007. Many take this as a harbinger of financial disaster. Is it? Flat or inverted yield curves typically signal a recession. And, it’s hard to argue the point. Investors would have … continue reading →
Yearly Archives: 2017
As we expected [see: Dollar Duldrums] the US dollar has continued to slide. Today’s price action threatens to take out the November 27 low and reach our 91.483 target. Today, we’ll update some key currency pairs and see if we can make sense of the bond market. continued for members… … continue reading →
Stocks remain in a year-end holding pattern, meaning they’re getting plenty of support from algos. SPX had a shot at its SMA10 yesterday, but seems undecided between its 2.24 extension at 2703.62 and a backtest of its SMA10, currently at 2675.41. It’s a whopping (sarc) 1% spread which simply won’t make a difference.Things could get … continue reading →
Wishing all our members a peaceful holiday season and a joyous new year! * * * This past year was challenging in many ways. Despite record highs in the markets, poverty, food insecurity and homelessness have not gone away. About half the world population lives on less than $2.50 per day. Eighty percent live … continue reading →
If you saw this on an EKG, you’d call the time of death and wheel the patient down to the morgue. The horizontal lines below are, from top to bottom, the 200, 100, 50, 20 and 10-day moving averages. And, I can find no other time in VIX’s history when they were all arrayed in … continue reading →
VIX’s 200-day moving average just registered a 10-handle for the first time ever, dropping to 10.99 this morning… … in order to keep S&P futures in their recently re-acquired rising purple channel. We saw another test just yesterday (the yellow arrow.)As we discussed last week [see: The Chartist’s Dilemma] this channel dates back to August … continue reading →
The dollar continues to fizzle, but USDJPY is rallying anyway. CL, RB and VIX are jumping into the fray just in case, helping ES to a 9-pt gain as we go to press. Maybe Congress will un-pass and re-pass the tax bill a few more times in order to convince the algos to keep the … continue reading →
The idea of shorting the markets these days reminds me of the iconic scene in A Christmas Story where Flick is triple-dog-dared into touching his tongue to a frozen flagpole. It sticks of course. And, while not quite as painfuul as shooting your eye out with a Red Ryder carbine action two-hundred shot range model … continue reading →
Tax cut euphoria, combined with an overnight bump in CL/RB and a slump in VIX, has sent futures 10 points higher as we go to press. As we discussed Friday, ES has rejoined the rising purple channel in the year-end melt-up.continued for members… … continue reading →
As a chartist, you know something’s gone haywire when a major, long-term channel breaks down and it results in higher prices. Yet, as every chartist knows, this phenomenon has been a hallmark of the financial markets for the past several years.The S&P futures (ES) offer a very clear example. Like all channels, the rising purple … continue reading →