Looking at the bounce since Jun 16, I can’t help but think of Chuck Yeager’s ill-fated journey into space.
Futures are up very slightly this morning, fixated on maintaining prices through tomorrow’s massive option expiration.
VIX: an excellent example of maintaining an even strain.
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The equity picture is essentially unchanged. Stocks will either break out or they won’t. From a fundamental standpoint, they’re way over their skis. But, that hasn’t mattered much lately.
Currencies are also still on the sidelines, though EURUSD is long overdue for another leg down.
GC, SI and BTC are all slipping – having seen bounces longer/farther than they should have.
Oil and gas are up very slightly too, though still in backtest mode – especially RB and its SMA200.
This leaves the 10Y in limbo, having broken out, backtested, broken out again, and now slipping. I suspect it’ll remain above the yellow channel top until the SMA200 emerges, but will give it another day or two before adjusting the charts.
Yesterday’s minutes can be summed up in one word: meh. There was something for everyone – hawks and doves – with the usual catch all phrase “data dependent” utilized quite liberally. While the Fed might consider current rates in keeping with the neutral rate, they’re certainly not consistent with where inflation is now.
Minneapolis Fed president Kashkari and Kansas City Fed president Esther George speak after the close, and Richmond president Tom Barkin speaks tomorrow morning before the open.
Almost a month ago, Kashkari said that markets had gotten ahead of themselves in anticipating rates leveling off or declining. Of course, this was the day before stocks broke out of the falling channel they’d been in since November and raced another 6% higher. The algos obviously ignored him.
Stay tuned.