After weeks of gathering clouds, the storm we’ve been watching has finally arrived. S&P futures are lock limit down just a few points above our next downside target. Not surprisingly, all of our other targets across currencies, commodities and fixed income have either tagged or exceeded our next downside targets, with more to go once … continue reading →
Once upon a time, a few boys whose families owned the biggest lemon groves in town got together and opened up a lemonade stand. It was a very hot summer, so they sold an enormous amount of ice-cold lemonade. Since they controlled the supply of lemons, they were able to quickly raise prices from 10 … continue reading →
You may wake up and see futures down 60 points only to find they’re bouncing off the bottom of a rising channel and backtesting the (now) support of the 200-DMA. You may find that VIX remains very much under control even though a global pandemic that central banks can’t “fix” is ramping up. You may … continue reading →
I’ve done some calculations on the spread of the coronavirus in Italy, which has presumably learned a thing or two from China’s experience but suggests a path for other countries just now coming to terms with their own exposure. Granted, Italy’s quarantine and aggressive treatment might put a dent in the exponential rate at which … continue reading →
We called the top on the 10Y on October 10, 2018 [see: Plan B] with rates at 3.24% and ZN at 117’230. Since then, prices have rallied about 15%. …I’ve always been inclined to believe more in the yellow channel — which says that 10Y yields have now topped and ZN has bottomed. The price … continue reading →
The rescue operation we detailed on Monday [see: Rescue Operation Underway] is taking another stab at the 200-DMA this morning after the Fed’s ill-advised emergency rate cut nearly unraveled the progress the algos had already made. Again, it’s a battle between the algos and fundamentals with numerous factors lining up to nudge stocks past important … continue reading →
My daughter is enjoying a semester abroad in Rome, a metropolitan area of 4.3 million people with virtually no coronavirus cases and a sponsoring college which has urged but not required students to leave. Only 350 miles away, in the area around Milan, cases have increased 10X in the past week – with 2,036 cases, … continue reading →
You can tell, because it almost always starts with these little rising channels which accommodate the wild swings between gains and losses and, more importantly, steer them higher. In the charting world, this rising channel is also known as a flag pattern. It’s a continuation pattern which merely interrupts the downturn until it resumes. It’s … continue reading →
The great thing about studying how algos dominate the equity markets is that, if you look very carefully, you can see the gears and levers working in the background. In this morning’s pre-market, we can see a number of factors sliding into place which are designed to stop the market’s bleeding. First, VIX reached our … continue reading →
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