Over the past few years, the “market” has developed a knack for rising in spite of disappointing economic news. Before CPI reached 2.5%, we usually characterized it as “bad news is good news.” In other words, a moribund economy increased the odds of maintaining or even expanding the most accommodative monetary policy of all time. But, inflation … continue reading →
Monthly Archives: February 2017
The interplay between USDJPY and oil has been fascinating to watch. The yen carry trade used to be the primary driver of algos and, thus, equity prices. But, CL officially took over on Feb 11, 2016 and, despite the inflation complications it has engendered — not to mention a bearish channel breakdown and some of the worst … continue reading →
With CL and USDJPY both off this morning, and VIX showing the first signs of life in weeks, we’re finally seeing futures exhibit a little weakness. Can VIX hold its breakout this time? continued for members…. … continue reading →
We’ll start out today with a quick chart that says much about how these small pre-opening dips keep turning into nice gains on the day. Note that VIX [see: VIX – Just Another Tool] is ramped higher most every night following the close. This tends to produce small losses in equity futures (the thin purple … continue reading →
The algos have been working overtime this holiday weekend. CL is threatening another breakout, VIX is back below the two-month old bullish (for stocks) channel, and USDJPY is potentially staging a comeback. It was enough to prompt a 5-pt bump in the futures which, while not much, is enough to keep the trend alive…for now. … continue reading →
The good news is that California’s drought is officially over. The bad news is that the storm that hit the central California coast last week continues to rage. Our power is still out, and now we’re getting word that we might have to evacuate. Apparently, the one bridge connecting us to civilization is on the … continue reading →
Yesterday morning started out promising for bears. But, the downdraft in CL that allowed a 13-pt decline in SPX was quickly erased. From then on, SPX had a great deal of difficulty reaching even obvious levels of support. Instead, we saw yet another insufferable meltup. CL took the opportunity to gap higher overnight. So, what does … continue reading →
This morning looks a lot like the last two, with one notable exception. VIX has risen sharply over the past 24 hours. No surprise, then, that CL has spiked in order to offset it. The net effect: ES and VIX rising in lockstep — as if things couldn’t get any weirder. continued for members… … continue reading →
Did you like yesterday? We have futures off 4-5 points this morning on higher inflation (+2.5% yoy), lower real earnings (-0.5% mom), surging oil inventories, hawkish Fed testimony, etc. But, we also have retail sales and Empire Fed popping and, of course, another day of Yellen testimony. So, a mixed bag. The one key difference … continue reading →
With an economy bumping along, stagnant in most respects, and inflation on the rise, it’s getting harder and harder to avoid the stagflation diagnosis. Let’s see what Ms. Yellen comes up with later this morning. For those who missed it, PPI was up a blistering 0.6% last month — largely on the sharp rise in energy … continue reading →