pebblewriter

Category: Charts I’m Watching

  • PPI Tops Consensus Again

    For those looking for inflation to top out, today’s PPI report of 0.4% versus 0.2% consensus was a disappointment.

    After ramping sharply overnight, futures are now trying to hold on to meager gains.Meanwhile, the yen has plunged to levels not seen since 1998. If USDJPY tops 147.65, the previous high was back in 1990.  The BoJ’s commitment to the yen carry trade is astounding. Talk about “all in…”Don’t wander too far from your computer. Fed minutes are due out at 2pm ET today and CPI comes out tomorrow morning.

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  • Our Analog: Then and Now

    Futures have been all over the map this weekend following the breakdown of the small white flag pattern on Friday.  But, the key factor is that VIX is higher and should experience a golden cross as we approach PPI tomorrow and CPI on Thursday.

    Our downside targets remain unchanged with SPX now within a few percent of our analog’s target from this past May [see: Analog Watch.]

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  • A Jobs Report That Matters

    The thinking goes like this: a strong jobs report is bearish for stocks because it might delay the Fed’s eventual pivot; while, a weak report would be bullish because it might accelerate the Fed’s pivot.

    The futures are on the fence, but not for long.

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  • OPEC’s Party Was a Bust

    OPEC+ threw the party they said they would. Everyone was talking about it. But, nobody came.

    CL and RB had already celebrated in the days leading up to the meeting and we were left with a non-event with CL stuck at a channel top and RB slamming into its 50-day MA.  Might there be an after party?

    It matters because the 10Y is in a dicey position – bouncing off its TL, but without a clear engine for more upside.continued for members… (more…)

  • All Eyes on OPEC+

    If the enemy of my enemy is my friend, is the friend of my enemy my enemy? The relationship between the US and the Saudis has been through plenty of ups and downs, but it’s been years since it was as fraught as it is now.

    The West is trying to put the screws to Russia, which in turn is trying to put the screws to the eurozone by enlisting the help of the Saudis, who are arguably US allies… Around and around it goes, with a decision due out later today that might spell a 2MM bpd (about 2%) cut in production.

    Will it be enough to revive the correlation between oil/gas prices and interest rates? ES is positioned to at least backtest its SMA10.Stay tuned.

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  • VIX: Not a Coincidence

    When COMP bounced at 10,572.33 on Friday, a mere 7.19 above its June 16 lows, it might have struck some as a coincidence.  It wasn’t.

    It was a well-coordinated effort to ensure that new lows were avoided – at least for the time being.The usual culprit: VIX.  For the 6th session in a row and the 12th time since Jan 24, 2022, VIX tested and retreated from the same trend line – an occurrence the algos have been well trained to respond to with a bounce.  The June 13 test went further, producing a huge bounce because it also broke below two significant trend lines of support as well as producing a bearish (bullish for stocks) alignment in moving averages.

    Yesterday’s huge plunge in VIX similarly wreaked havoc with moving averages – postponing (at least) an imminent 50/200 cross.  Will this short squeeze rally follow the same playbook?

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  • Charts I’m Watching: Oct 3, 2022

    Futures are up about 1%, backtesting the June lows as we approach the opening bell.

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  • PCE Accelerates

    PCE came in hotter than expected: 4.9% versus 4.7% expected/previous. Futures, which were up nicely overnight, are back in the red and testing the June lows again on the last day of Q3

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  • Q2 GDP Still Negative

    The third Q2 GDP estimate came in the same as last time: -0.6%. Q1 GDP was unchanged at -1.6%. In other words, 2 quarters of negative GDP – a recession in most folks’ minds. The deflator ticked higher to 9.0%, making a pretty good case for stagflation. The only missing ingredient is worsening employment numbers…

    Futures were already off, but this didn’t help.

    Our equity outlook remains unchanged.

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  • BoE – The First to Blink

    That didn’t take long. After watching the pound drop below its 1985 all-time lows, the Bank of England decided 10.1% inflation isn’t that big a deal after all. This is disastrous policy piled on top of disastrous policy. But, it was enough for the pound to recover – at least for now.And, because if one central bank can blink they all might, it was enough to jolt futures back to green after they sank below their June lows.

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