Algos to Markets: All Better

VIX and USDJPY have come to equities’ rescue (better late than never) again. And, the algos are loving it — so far, at least.

USDJPY, which has looked extremely weak ever since January, when two channels broke down, has broken out (again) above a trend line (red, dashed) from Jan 8. It’s latest reincarnation began on Sunday and contributed to yesterday’s huge rebound off our downside target.Likewise, VIX gave the bulls a shot of adrenaline, with a drop back below the rising channel bottom from early January. The trick is figuring out whether or not the drop will stick this time.Meanwhile, our FB and yield curve models are still shouting “sell!” We’ve seen major trends broken in the past two months — largely because our algo inputs were unable or unwilling to keep the crap game afloat. Can the algos pull off a rescue that sticks this time?