The algos are still threatening new all-time highs, this time egged on by the “wonderful” news that only 963,000 new unemployment claims were filed last week and only 15.5 million Americans are currently drawing unemployment.
It didn’t hurt that VIX made several sudden plunges in the past hour and that the USDJPY is threatening to break out again.
continued for members…
The bigger picture…
…and ES’ reaction. Note the internal trend line. ES needs to hold it if the bulls are to win the day.
It sure seems inevitable… 
If USDJPY actually breaks out (the gray alternative channel?) in service of NKD making new highs, then SPX shouldn’t have much trouble.
CL and RB are doing the same thing as yesterday: still threatening a breakout even though we’ve seen lots of headfakes lately.
Elsewhere in currencies, EURUSD is getting a corrective bounce, with DXY easing back toward the .707 lows at 92.528.
Bond markets are relatively quiet, with 2Y and 10Y yields both creeping higher and the 2s10s sitting at 53 bps, just below yesterday’s highs. The trend is still broken down.
I need to hop on a call. I’ll be back to look at the latest economic data.
UPDATE: 3:55 PM
The 2s10s reached a high of 56 bps earlier. Remember, a breakout is much worse than a breakdown in terms of its effect on equities.
One potential path…
Comments
One response to “New Highs Inevitable?”
I took advantage of the lower VIX on Tuesday buying SPY puts expiring Dec 2022 (patiently waiting for the past five months for it to hit the 20 level). Next week will be five months from the low made in March. After the 1929 crash low, the markets rallied 50% over five months. I expected the same this time…and wow, what a surprise…another 50% rally!