The dominoes are all lined up so nicely.  Who’s going to tip the first one over?continued for members… (more…)

Just a quick update to our last update [see: Sep 20 Update on Gold] as GC has reached our initial downside target.

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At the time of our last update [see: Sep 7, 2017 Update], oil had reached our 49.75 upside target, selected because it marked: (a) a trend line dating back to June 2014, (b) the midline of a large, rising channel, and (c) CL’s 200-day moving average.  I called for a reversal, and apparently wasn’t alone in my thinking. CL plunged over 4% the following day — a nice start to the 13% drop I expected.

Needless to say, this was a problem for stocks, which had just flubbed an assault on the psychologically important 2500 (SPX) and faced resistance of its own.  As has happened countless times before, oil futures bottomed out and spiked higher right as the market opened.  SPX gapped open with an 18-pt gain and, thanks largely to CL’s recovery, never looked back.

The only problem with this scenario was inflation.  Gas futures (RB) had closed August on a high note, the top of a channel dating back to Aug 2015.  I had called for a reversal at 1.78, reasoning that inflation would spike higher unless RB fell sharply.

With stocks counting on CL’s continued ascent, and the Fed counting on RB tumbling, was there a scenario that could satisfy TPTB’s needs?  There was, but it involved some last-minute theatrics and required the EIA to falsify its gas price data for the month.

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There was a time when VIX tagging 9.30 was momentous.  VIX’s all-time low of 9.31 was reached on Dec 22, 1993 and it subsequently soared as high as 89.53 (Oct 2008.)  This past December, however, marked a progression of lower and lower marks that culminated in a new all-time low of 8.84 in July.

Want to know whether stocks have topped out?  First, you’d have to ascertain when VIX will stop melting down.  We’ve seen 17 straight sessions below the bottom of our long-term yellow channel.  The only signs of life were the backtest of a rising channel that broke down in order to get SPX up over 2500.With important resistance coming up today for SPX/ES, might VIX be ready for another (easily-contained) pop?

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Years that end in “7” and Octobers are often full of fireworks.  Since we’re in October of 2017, might we finally get a respite from the melt-up?

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There’s not much to be get excited about in these past 24 hours as we ease into the last session of the quarter.  RBOB dropped to our initial target but seems to be hung up there for reasons we discussed yesterday.  Stocks are levitating nicely, but one gets the sense the other shoe might be about to drop.

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It starts out with a bright, buoyant red balloon, but goes downhill awfully fast.  (spoiler alert: a sewer-dwelling, child-devouring clown that somehow isn’t all that funny.)

So it is with this market.  The S&P 500 has been floating along for over two weeks, close enough to 2500 to reach out and snatch it any time it likes.   Yesterday, it finally tagged our 2510.87 upside target and managed to close above 2500, with only two days to go before quarter-end.

Is this the start of the next leg up, or should we be alarmed by those sinister sounds gurgling up from the sewer?  [And, no, it’s not just RBOB, which hit our next downside target overnight.]

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In what were generally viewed as hawkish comments, Janet Yellen reinforced the widely held expectation of a rate hike in December.  USDJPY is rallying strongly in response.

After struggling for the past week at the SMA200 and, more recently, at a TL off its recent highs, it is making a show of breaking out.  Needless to say, equity futures are responding in kind.continued for members… (more…)

Futures are slightly positive this morning even though RB and CL are slumping — primarily on an overnight VIX dump — off 9.9% from yesterday’s highs. Note the SMA10 at 10.08.Traders will remain focused on Fedspeak and North Korea, either of which has the potential to upset the month-end run for the barn.

SPX and ES both reached our initial, minimal backtest targets yesterday.  As I posted last night, the next steps are a bit muddled.

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Futures are currently off about 5 points as VIX, again, pokes its head up over 10.  This has been going on for the last 7 sessions or so.  Again, the question is whether it’ll last this time.  Overhead resistance awaits at 10.75.continued for members... (more…)