Yes, it was way overdone. And, yes, it was the VIX action we had highlighted. Specifically, it was VIX’s 16% “breakdown” from Tuesday’s highs that sent the algos into a frenzy.
Unfortunately for the bulls, ES was driven right into overhead resistance.
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GDP increased at an annual rate of 1.1% versus expectations of over 2% and Q4’s 2.6%, fueling both recession fears and expectations that the Fed will soon halt rate hikes after next week’s 25 bps increase.
Futures dipped on the news but have since rebounded as the usual VIX smackdown convinced algos to look on the bright side.
For now, algos are ignoring the hotter Q1 PCE data embedded in the GDP print.
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There’s something in March’s durable orders report for both bulls and bears. The 3.2% topline number was wildly better than the 0.7% expected and -1.2% previous. But, it was driven primarily by large Boeing orders.
Non-defense capital goods excluding aircraft, a proxy for business spending plans, dropped 0.4%. And core shipping logged another 0.4% drop.
Stocks were little phased, as they’re still marching to VIX’s drumbeat. But, the 2Y is back below 4% as First Republic reminds us that the banking crisis has not gone away.
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Futures are off 20 points this morning as signs of a continuing banking crisis combine with debt ceiling jitters and mixed earnings to ramp up investor concerns. 
You wouldn’t know it from VIX futures, however, which remain locked in a narrow range of complacency.
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Futures are flat this morning after climbing back from a 20-pt overnight deficit. With scores of companies due to report earnings this week, we should be in for a wild ride.
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Futures are flat after being off modestly overnight. The action over the past few days, however, point to more losses once we’re past OPEX.
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Futures are off about 30 points on disappointing earnings from stocks such as TSLA, AXP, KEY, etc. and a continuing slump in oil and gas.
VIX is even popping as we approach the open. If it holds, the rollover in equities will have officially begun.
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Futures are off moderately on light volume…
… and, surprise!, a rebound in VX futures, but not VIX itself. Oh yeah, Friday is OPEX.
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ES is up 1.3% in the past week. All it took was a 15% beatdown in VIX.
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VIX came within .01 of its previous lows on Friday…
…leaving plenty of doubt as to the algos’ next move. Today, we should see some resolution as moving averages start to roll over.
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