The headlines have been coming fast and furious over the last 24 hours. First, Trump’s tweet yesterday morning regarding trade negotiations with China touched off a rumor, declared false this morning, that a trade deal was imminent. But, SPX soared yesterday anyway.
Then AAPL’s earnings came out. The numbers were underwhelming; and, the company’s announcement that they’d no longer report unit data was very poorly received.
The chart we put up yesterday prior to the close [see: All Eyes on AAPL] showed substantial downside potential…
…which after-hours trading is confirming.
Then there was this morning’s payrolls data: a 250K increase with a 3.1% increase in average hourly earnings. While no doubt It’s exactly the sort of data the Fed needs to justify further rate increases in the face of the collapse in oil and gas prices — the last piece of the puzzle.
Gasoline has now fallen over 20% since our Oct 3 short call and tagged another downside target yesterday.
Oil is off over 16% and just broke beneath horizontal and channel support. To be sure, it will keep October’s CPI low and will delight voters driving to the polls on Tuesday. But, like the employment data, there are repercussions.
By the way, I have updated our oil and gas forecasting results, available at the links below.
I hope to post currencies, VIX and gold later today or this weekend.
Futures melted up to backtest the SMA200 early this morning and have since fallen 16 points to the algo-darling SMA5 200. It remains to be seen how the mixed messages being sent up from Washington and Cupertino will play out. But, for now, I’m leaving our targets in place.
For the moment, at least, VIX’s 50/200 cross is on again.
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