Futures are off modestly following Friday’s backtest of the initial head & shoulder  neckline.

Note that SPX’s SMA200 has finally reached its former highs. As we discussed quite some time ago, this allows a significant backtest with the benefit of the support the SMA200 would offer. It’s a prime opportunity for TPTB to let a little air out of an overinflated market.

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The market failed the first test, the smaller Head & Shoulder Pattern at 6800 that pointed to 6535. Now, it’s getting a shot at the larger one that points much lower.

The key will be whether it can hold 6700ish.

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There’s a famous quote from Terminator 2: There is no fate but what we make. It seems particularly apt at this stage of the economic/political cycle.

The government reopened, but the news is chock full of important developments including Trump’s countless unforced errors which drive his increasingly fraught future. We’ve known since well before liberation day that the inflation bill would eventually come due. You could say the same about the deportations which are producing labor shortages and driving up costs. How much longer can the K-shaped recovery continue to diverge before we see a reversion to the mean?

Futures are staging a repeat of yesterday, with the overnight ramp job fizzling as we approach the open.

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Futures are up moderately ahead of the House vote to reopen the government.

I seriously doubt it will go smoothly.

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Futures are slightly lower following one of those spasmodic, overdone rallies driven by the latest collapse in VIX which was, in turn, driven by news that the government shutdown might soon be over.

Whether or not it will is still very much up in the air – unlike thousands of flights which were cancelled yesterday. It’s hard to imagine that Trump’s unhinged threats to the air traffic controllers will help.

This being Veterans Day, we salute all of our current and former service members. My own father served in WWII in the 89th infantry, the division that liberated most of the German concentration camps during a 640 mile march from La Havre, France to Zwickau, Germany – an experience which shook him until his own death.  My uncle served in the army in Korea and, similarly, was shocked by what he saw on the battlefield.

I’ve written before about a very close friend, Michael J Novosel, MOH, whose military career began with flying a B-29 in WWII for the army air corp. He was riffed out after the Korean War as a Lieutenant Colonel. Years later, he gave up his air force rank to join the army as a chief warrant officer and fly Huey helicopters in Vietnam, flying 2,543 missions and rescuing 5,589 wounded personnel, including his son Mike Jr. The following week, Mike Jr. returned the favor by saving his father after he was shot down.

Mike was awarded the Medal of Honor for a mission during which he was shot down (one of many) which he described to me as fairly typical. But what impressed me the most was Mike’s evolution as a soldier: from firebombing Japan from the relative safety of a B-29 to hosing blood and body parts out of his Huey after each mission. Like my own father, he learned what most of us can’t fully comprehend – that there’s nothing glorious or glamorous about war. As Steinbeck wrote: “All war is a symptom of man’s failure as a thinking animal.” Perhaps if our political leaders were required to go into battle and witness war’s horrific reality, they’d be less inclined to send so many young people to their deaths and would take better care of those who manage to return.

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Futures are up sharply after reports that eight Senate Democrats have caved on their demand that ACA healthcare subsidies be preserved for millions of Americans.

In exchange, they have reportedly secured a promise from Republicans to hold a vote in December on whether the subsidies will be extended. If unsuccessful, healthcare costs will soar for 22 (92%) of the 24 million Americans receiving help paying for healthcare under the Affordable Care Act.

The eight senators who broke with their party faced a difficult choice: throw millions of America’s most needy citizens under the bus with regard to healthcare or throw other millions of Americans who have been affected by the shutdown under the bus.

The House must still vote to pass the CR under the same terms.

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Futures are all over the map this morning, but are currently flat as Challenger job cuts reached the highest level for October in 22 years.

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The market reminds us of the line from Hemingway’s The Sun Also Rises: “gradually, and then suddenly.”

Futures are flat following yesterday’s horrid performance as the government shutdown becomes the longest ever. We also just heard that the nation’s airspace could be closed over Thanksgiving due to a lack of air traffic controllers. And, Trump’s “mandate” is now clearly in question as virtually every important election was won by Democrats. All this, on top of news that Michael Burry had in effect shorted $115 billion of notional on some of the Street’s highest priced darlings.

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Futures are off sharply after billionaire investor Michael Burry, of The Big Short fame, disclosed his purchase of five million put options on Palantir and one million put options on NVIDIA.

ES has reached our first downside target.

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