This Too Shall Pass

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Housing starts and permits both fell, with starts missing expectations by a mile. Philadelphia Fed index also fell and saw a big miss. Capacity utilization and industrial output both missed and fell. So, naturally, the OPEX-obsessed S&P 500 futures are up 10 points.

If things seem a little upside down at this point, know that this will pass very soon. If only Grandpa Kudlow’s diatribe would…

continued for members…ES’ overnight ramp job enabled it to tag its .886 — finishing off the Bat Pattern that SPX already completed.

As we discussed yesterday, VIX is at very important support. Though futures are taking their cues from pre-market softness. Remember, EIA inventories come out at 11:00AM, one day late due to the holiday on Monday.

USDJPY continues to levitate — for now.

And, the 10Y continues to coil.

The biggest miss our analog has experienced to date was the failure to dip again in mid-September on Days 27 and 32 — which were days leading up to the Sept OPEX.

It eventually rolled over, but by then the SMA200 had climbed 30 points and SPX still failed to tag it when it had the opportunity on Oct 3.

Today, the analog calls for SPX to be 133 points lower. It’s obviously been at least delayed, with the risk that the pre-FOMC ramp takes over before stocks have a chance to reset lower.

On the other hand, the FOMC meeting won’t take place until Oct 29-30, so the likelihood is that a Day 62 peak originally set for Oct 28 will be delayed. If the whole pattern is delayed by two days, that would give us extra time for these two dips to occur.

More later.

UPDATE: 11:00 AM

Huge build in crude inventories, the 3rd highest since 2017.