Yesterday’s near-breakout was tempered by a failure of VIX to break down. The indecision carried over to this morning, where VIX remains in a consolidation pattern that promises a significant move — one way or the other. The major indices are essentially in a holding pattern, which typically indicates a sell-off lies ahead. Our yield … continue reading →
While SPX has pushed above its 2.24 Fib extension multiple time over the past two months, and has remained safely above the critical support for the past seven sessions. ES, on the other hand, has really struggled. Following a failed rally on Mar 21, ES didn’t even tag its (2728.79) again until May 11. Since … continue reading →
As the 10-year pushes past 3%, we’re left to wonder whether flows will begin to favor bonds again. In a world of 2.5% inflation, bonds might seem like a sucker’s bet. In a world of 8-10% inflation, even more so.Yet, we often buy instruments with little long-term value but plenty of short- or medium-term appreciation … continue reading →
TNX reached 3.11 this morning, but DXY isn’t buying it. We asked rhetorically, yesterday, whether “investors algos [will] even care about the stagnation which, abetted by inflation-driven higher interest rates, has ensnared the economy in its razor sharp talons? Or, will a tumbling ‘risk indicator’ and copious share buybacks be enough to ward off a … continue reading →
While a higher dollar might help mitigate inflation, higher interest rates are starting to bite. Both mortgage refinancing and housing starts and permits tumbled in April. Futures tumbled about 5 points on the news. But, even that was a problem, as SPX is perched precariously atop the critical support of its 2.24 Fib extension at … continue reading →
In our Mar 8 update [see: RUT – How it Got Here, Where it’s Going] we noted that VIX had been particularly sensitive to VIX’s machinations. In the throws of an analog at the time, we suggested RUT might be nearing a turning point. At some point, probably around Mar 14, VIX will plunge below … continue reading →
Higher interest rates and inflation, but falling retail sales? Not a great combination for equities. In fact, it feeds right into our base case of stagflation.Not even the venerable VIX gimmick was able to paper over the implications.Back on May 3 [see: Decision Time] we identified the 15-16th as a potential new low. The next … continue reading →
Take a look at Tesla’s bonds, and you might wonder if the company is careening towards that Great Center Divider in the Sky. Yet, TSLA stock has held on to some important levels of technical support. Setting aside the considerable, robust debate and analysis, what do the charts say? I’m a big believer in logarithmic … continue reading →
There are very few charts which tell the story of this market as dramatically as does VIX’s. The most noticeable pattern is the falling purple channel which accurately signaled its highs and lows between Nov 2015 and Jan 2018. But, this falling channel conflicted with a much larger rising yellow channel. In the wake of … continue reading →
With the algos firmly back in control of stocks, it seemed like a good time to take a step back and look at the big picture. The Iran matter changes a few things — with potentially much bigger changes to come. We’ll start with VIX which, as expected, continues to get hammered — particularly when … continue reading →