COVID: Still With Us

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Interesting piece in Reuters today on Japan’s vaccination efforts and the overwhelming level of infections in Osaka, Japan’s second largest city, only two months ahead of the Olympics.

While many countries are making good progress with vaccinations, Japan – the 11th most populous country in the world – is lagging badly. It’s not the only country in Asia to be struggling.A close-up of vaccination rates shows that many Asian countries are in the same boat.Will the Olympics be the next global superspreader event or, perhaps, the next Tom-Hanks-has-COVID! moment? Those who have put off getting vaccinated might want to consider the number of daily flights from Osaka to the US…

Meanwhile, futures are paying more attention to the daily pre-opening VIX plunge and a bond market which seemingly no longer cares about inflation.continued for members…

SPX completed a perfectly formed flag pattern last week which, unless SPX exceeds 4190ish, points to an A-B-C target of 4007 and a 1.272 extension target of 3958 – right on top of the yellow 3.618 Fib extension. The timing is still a bit of a mystery.With the falling white channel busted, the 3.618 backtest probably takes precedence over the intersection of the white .618 and purple channel bottom previously charted.The other potential glitch is the fact that ES has not formed a nice little flag pattern. Doing so would mean a rise to 4207ish, almost to the .886, which of course would bust SPX’s flag pattern. But, it would result in a A-B-C pattern down to the ES 3.618 at 3997.Either way, it seems like the market is just buying time – with the backtest inevitable at some point between now and early June. The SPX version:

DJIA, by repeatedly failing to break out, continues to support the notion that the next move is lower.

In currencies, USDJPY has technically broken down – but only for people who care about trend lines. Otherwise, we could call it a triangle or pennant pattern which is typically a continuation pattern. Bottom line – tentatively supportive of stocks.EURUSD and DXY are still treading water – mildly supportive of stocks.

GC and SI continue to edge higher… And, BTC has officially given up the SMA200 and 2.618 Fib, with the plunging SMA10 about to cross below the SMA200 today.

With bond yields contained at the moment… …the Fed has little reason to force oil and gas prices lower. CL is backtesting a broken triangle pattern, and RB is basically meandering.