Futures are up slightly as we approach the opening bell. We’ll keep an eye on factory orders coming out at 10am for signs of that economic slowdown seemingly everyone is now forecasting.
continued for members…
The equity picture:
I’m focused on ES’ red channel backtest. The red channel goes back to June 2020, breaking down during Jan 2022’s slide. That decline, however, was bought so aggressiverly that ES ended up back in the red channel before the Feb slide.
Stocks have rallied very consistently since the day after the death cross on Mar 14. ES is above every one of its moving averages.
SPX’s chart is a little less cluttered, showing the same setup. I’ve sketched in a proposed new falling channel in white which fits reasonably well.
Those red channel incursions were driven primarily by a 50% collapse in VIX over the course of 7 sessions.
The more recent 50% crash took a little longer – 15 sessions and counting – but has been equally effective. Note that VIX is now wedged in above the purple TL from last November but below its SMA200. Where it goes from these tight confines will determine what happens next to equities.
CL and RB are still climbing, though well off their highs. The news out of Ukraine is mixed at best. One thing which is crystal clear is that the Russian atrocities are galvanizing the rest of world into taking stronger steps to punish Russia. It’s hard to imagine what boycotting Russian natural gas might do to prices, but Spring is here and it seems increasingly likely.
On the currency front, DXY appears ready to finally make a run for 100.042 as USDJPY backtests its IH&S neckline and EURUSD contemplates another leg down.
GC and SI continue to settle toward their SMA200s.
And, BTC is taking modest losses, still settling lower after its SMA200 backtest.
I saved the best for last. The 2s10s has finally collapsed into negative territory.
