pebblewriter

Category: Charts I’m Watching

  • What Inflation?

    The Case-Shiller Home Price index rose 12% YoY – the fastest pace since February 2006 – meaning even fewer Americans have a shot at purchasing or renting a house. Ironically, the burden falls mostly on the low-income families that the Fed claims to be most concerned about. Thank goodness we don’t have an inflation problem.

    In unrelated news (not), futures notched a new all-time high overnight and have essentially busted the little H&S Pattern that might have resulted in a massive (sarc) 1.8% selloff.

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  • Update on Oil & Gas: Apr 26, 2021

    March durable goods orders disappointed this morning, coming in at 0.5% versus the 2.3% rebound expected after February’s -1.2% flop.

    We couldn’t help wonder whether the data were somehow related to the first (tiny) breakdown in RBOB prices since the Mar 23 lows.

    Given that oil and gas are poised to deliver a huge increase in CPI for April, this might be a good time to review where we are and where we’re headed.

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  • A New Catalyst

    Futures are struggling to retain their overnight bounce as we approach the open.  Yesterday saw equities drop like a rock on the news of a possible substantial increase in capital gains taxes for investors with large gains.

    This should come as no surprise to anyone who ever listened to candidate Biden, but markets are touchy about taxes.

    According to USDJPY, which broke down yesterday, there’s still more downside to come.

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  • More Backtests Please

    Futures are flat this morning on a very quiet news day. Not even the ECB’s mind-numbing something-for-everyone statement could motivate markets to budge off “unchanged.” This, of course, comes after a classic VIX dump ramp job into the close yesterday which resulted in more important backtests.

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  • Charts I’m Watching: Apr 21, 2021

    Futures are backtesting the 10-day SMA this morning in the wake of the first two day decline since March.

    Look for more to come.

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  • Out of Office: Apr 19-20

    A reminder, I will be traveling today and tomorrow. Please refer to Friday’s post for relevant targets for equities, currencies and commodities.

  • Moment of Truth: 2021 Edition

    With various indices reaching or nearing important overhead resistance, today is shaping up as a moment of truth for a market which has delighted in head fakes.continued for members… (more…)

  • Last Call

    Despite a few tense moments midday, ES held the TL of support from last Wednesday and has rebounded to within 7.50 points of the important Fibonacci extension and channel top at 4153.62.Will the substantial overhead resistance at these levels matter this time? We’ll know very, very soon.

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  • VIX: Plunging as Fast as it Can

    Futures were on the path to tag an important Fibonacci extension this morning when someone committed the cardinal sin of checking the headlines.  The 6-point gain turned into a 2-point loss, causing VIX to swing into action. Can its sudden 7.63% plunge compel algos to prop up stocks yet again?

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  • CPI’s Head Fake

    This CPI data is significant in that it shot up over 2% – the highest since 2018 when the prints of 2.95% (July) and 2.70% (Aug) sent the 10Y up to 3.25%. But, it’s the inflation happening right now, which will be reported next month, that the Fed is worried about.

    As we’ve anticipated, March’s 2.6% YoY print was largely the result of a large (22%, should be 28%) increase in gas prices. Though clearly non-transitory food, utilities, used cars and medical services all played an important role. The data next month, however, will put this to shame. As things stand now, April 2021’s gasoline prices (2.77) are up a whopping 60% over 2020 prices.

    As we’ve discussed many times, this should put CPI at over 3% – perhaps closer to 4%.

    The Fed seems to be betting that it can divert attention from the coming data. And, maybe they can, as bond prices seem to be immune to this data and the recent blowout PPI.

    But, it remains to be seen whether the usual algo tricks will be able to handle a CPI print of over 3%.

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