pebblewriter

Year: 2024

  • Charts I’m Watching: Feb 6, 2024

    Futures are slightly higher on the heels of VIX’s 7% collapse from yesterday’s highs (on a day when stocks were broadly lower.)

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  • Charts I’m Watching: Feb 5, 2024

    Futures are a little soft this morning in the wake of Jay Powell’s interview on 60 Minutes over the weekend. Notably, he didn’t retract any of the hawkish comments made after the last FOMC meeting.

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  • NFP Soars

    Nonfarm payrolls soared by 353,000, more than twice the 175,000 expected. Average hourly wages also beat at +0.6% (+4.5% YoY) versus +0.3% expected. Unemployment remained at 3.7%. Forget about a March rate cut. Bulls will be lucky to get one in May.

    The overnight ramp job has completely disappeared, with futures struggling to remain positive.  AAPL‘s meltdown hasn’t helped.

    Factory orders and Michigan consumer sentiment are due out at 10ET.

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  • No Pivot, No Punch Bowl

    Powell said what many of us have been thinking: There’s no reason to rush into a rate cut. The part he didn’t say (but implied) was that there was a clear risk to cutting rates at this time.

    The market, which has been fueled for months by rate cut expectations, was quite disappointed. SPX shed 1.5% and closed at the bottom of the acceleration channel it’s been in since October. It was only a little bit scary.

    Futures fell to slightly below our initial downside target before rebounding overnight on the usual algo nonsense.

    Does yesterday’s action change the overall picture?  Maybe.

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  • FOMC Day: Jan 31, 2024

    It has been a long time coming, with expectations of a rate cut ranging from “certainly” to “not a chance in hell.”

    Futures are taking their cues more from GOOGL and MSFT than the FOMC at the moment.

    Will we finally get a real backtest? Our potential downside targets are getting very lonely.

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  • Will They or Won’t They?

    Futures are off moderately as investors place their bets on tomorrow’s FOMC rate decision. This follows yesterday’s pop in prices which was reported as motivated by a better than expected treasury report, but was in reality driven by [drumroll please] more algo funny business in VIX.

    In any case, SPX was finally pried off its 2.24 Fib extension just in time for tomorrow’s FOMC decision.

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  • Charts I’m Watching: Jan 29, 2024

    Futures are flat as we enter a data-laden week accented by Wednesday’s FOMC interest rate decision.continued for members… (more…)

  • PCE in Line, Home Sales Beat

    PCE increased 0.2% MoM and 2.6% YoY in December, in line with most estimates. Core PCE increased 2.9% YoY.  This is the smallest gain since Mar 2021. Drilling down, goods rose 1.1% (durable goods 1.5%) in December while services rose 0.3%.

    Real PCE rose 3.2% YoY, with the goods category growing 5% and durable goods rising 8.5%.

    At 0.7% MoM, personal spending rose substantially more than the 0.4% estimates (and prior.) Spending rose 4.2% YoY, a slight decrease from November’s 4.4%.

    December pending home sales far outpaced estimates at +8.3% versus 2.0% and -0.3% prior. The annual increase was much less frothy at 1.3%. The monthly beat was paced by 11.9% and 14.0% gains in the South and West respectively. Sales dropped 3.0% in the Northeast.

    Futures are off slightly after rebounding from their overnight lows.
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  • INTC: Coulda Seen it Coming

    If you knew absolutely nothing about the company Intel, but knew just the basics of chart patterns and Fibonacci patterns, today’s sharp pullback would have come as no surprise. In fact, you could say the same thing about the past 25 years.

    Note that 69.29 was only 75 cents away from an 88.6% retracement (a bat pattern) and occurred at the top of an eleven year-old channel. Easy pickings.

    The subsequent drop would normally be to a lower Fib level which, in this case, was the 50% retracement. It also lined up with the bottom of the white channel. Also, easy pickings.

    The rebound back to the 88.6% retracement was only slightly tricky. It was in essence a double top, which are usually hard to anticipate. In any case, once the double top occurred, the subsequent drop was almost exactly to the 78.6% Fib retracement (not shown.)

    The rebound from there to its recent highs, however, was almost exactly a 61.8% retracement (44 cents off, again easy pickings.)

    Volumes have been written about how/why chart patterns and Fibonacci patterns work. It makes for interesting reading. But, for those who don’t care how the watch works and just want to know what time it is, it’s good info to have.

    Speaking of which, if INTC doesn’t recover to at least the bottom of the little purple channel below (45.50ish), things could get much worse.

    Stay tuned…

  • Q4 GDP Beats

    Q4 advanced GDP came in at 3.3% annualized versus 2.0% estimates and full year 2023’s 2.5%. The PCE price index and durable goods orders came in as expected, though durable goods ex-transportation came in sharply higher than estimates.  The numbers…

    Futures had already bounced at the rising white channel midline, but extended their gains after the data dump. The more important chart to watch, however, remains SPX itself.

    New home sales are due out at 10 ET.

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