pebblewriter

Month: June 2023

  • FOMC Aftermath

    Things got a little hectic after the FOMC’s hawkish pause, but the equity market performed as planned.

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  • FOMC Day: Jun 14, 2023

    According to futures and talking heads, there’s a 94% chance that the Fed will pause its rate hikes this afternoon – though perhaps with a hawkish tilt. By our reckoning, equities have piled on at least 6% in the past few weeks in anticipation of this outcome.Is it justified?

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  • Headline CPI Falls, Core Stubborn

    Substantial YoY drops in energy prices continue to dampen headline inflation… …while core inflation gained 0.4% for the third month in a row.

    The comparison between YoY gas prices and CPI illustrates the outsized influence energy prices have on headline inflation.

    Futures, however, popped on the print on the assumption that the Fed will pause its rate hikes despite hotter than expected PCE and employment data that would argue otherwise.

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  • Charts I’m Watching: Jun 12, 2023

    Futures ramped up past a key Fib level overnight on hopes that the Fed will pause any further rate hikes this week.  Will SPX follow suit?

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  • Charts I’m Watching: Jun 9, 2023

    The prop job continues, with VIX reaching a lower low and the DXY still under pressure.

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  • Jobless Claims Spike Higher

    Initial claims spiked to levels not seen since October 2021, another indication of a slowing economy.  Applications rose by 28,000 to 261,000, well above the consensus of 237K.

    So far, futures have ignored the print.

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  • Charts I’m Watching: Jun 7, 2023

    Futures are flat ahead of tomorrow’s initial claims…

    …with VIX plumbing lows not seen since Feb 14, 2020, a mere 10 days before it broke out and soared to 85.47.As we’ve noted countless times, SPX broke out of its 2020-2022 decline only after VIX was hammered below a trend line dating back to Jan 2018.

    If it breaks above the Aug 16, 2022 highs of 4325, it will require lower lows by VIX. Otherwise, 4311.69 remains important overhead resistance.

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  • Close Enough?

    ES came within 4 points of its .618 retracement of the drop from the Jan 4, 2022 highs. SPX came within 12 points of its. From a harmonics standpoint, we’re at a critical potential turning point for equities.

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  • Charts I’m Watching: Jun 5, 2023

    Stocks were up sharply on Friday……as VIX plumbed new 2-year lows.

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  • Blowout NFP Complicates Fed’s Job

    Non-farm payrolls exploded higher in May, tallying 339K versus 190K consensus. On the other hand, unemployment rose from 3.4% to 3.7%.

    Futures initially slumped, as blowout job gains argue for further Fed tightening. But, VIX was hammered to lows of 15.12, a level not seen since Nov 2021, and the overnight ramp was salvaged, for now.

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