Escalating carnage in the Middle East points to a protracted and increasingly complex set of circumstances for markets, with oil prices and currencies confused as to how to respond. Futures are off moderately this morning, supporting our notion that a 200-DMA tag is still in the cards.
continued for members…
The equity picture: Note that the 10-day is now solidly above the 20-day…
…which contrasts with VIX, whose 10-day is below the 20-day even as VIX rises above both. This is obviously a potential head fake.
Currencies remain steady, with DXY still on track to move higher even as EURUSD and USDJPY do their best to maintain a beneficial stance for equities. Note that GC is making a bid to break out and SI is making a very strong backtest.
CL continues to suggest higher prices are ahead – acknowledging the increasing risk that the Israel-Hamas war spreads to neighboring countries.
The 10Y is even on the verge of making a higher high.
Stay tuned…