One of the more compelling relationships I recognized over the years is what I have dubbed our Yield Curve Model. Simply stated, it pointed out that every time the 2s10s broke down below significant support, stocks would suffer. But, the bigger disasters – think 2000-2003 and 2007-2009 – occurred when the 2s10s broke out after … continue reading →
Futures have been all over the map since yesterday’s meltdown with a 198-pt swing in ES since it tagged our .382 Fib target. As we’ve discussed, this was important support and allowed SPX/ES to bounce prior to dipping below Dec 2018’s lows. Overnight, we’ve seen minor bounces in oil and USDJPY, which has encouraged the … continue reading →
The futures are lock limit down again this morning, with ETFs trading in the after-hours indicating losses on the (eventual) open of up to 10%. This is probably not what the Fed had in mind when they unleashed the massive, emergency rate cut and $700 billion in new QE an hour before the futures opened … continue reading →
This article was originally posted March 13 and will be updated on a regular basis. Updates are in reverse order, meaning the latest update is just below. UPDATE: April 3, 2020 Out of curiosity, I took a look at mortality rate trends in a few other countries. While some are clearly better than others, every … continue reading →
Two charts best define the day we had yesterday. First, VIX tagged our next highest target: the intersection of the .786 Fibonacci retracement and the trend line connecting two previous highs. The other one was the SPX arithmetic (as opposed to log) chart, which stopped on a dime at the channel bottom.The bleeding continued well … continue reading →
SPX 2703 was the last line of defense for the seemingly endless rally from the 2009 lows – the yellow channel below.The futures were all set for SPX to open there in the morning…until Trump’s address, the NBA’s cancellation and Tom Hanks announced that he and his wife have the coronavirus — all moments which … continue reading →
Two short weeks ago I pointed out that, like many indices, RUT was at a critical level of support [see: Bonds New All-Time Lows.] Though we had already turned bearish, there was still the possibility that RUT would pull off one of its trademarked rebounds. This time it didn’t. In fact, just today it reached … continue reading →
ES’ original recovery channel officially bit the dust yesterday. This morning, we have a new, less ambitious one offering to take its place. However: the SPX problem persists: What to do about SPX 2703.62? ES’ new channel will also need to break down if we’re ever to reach the strongest support possible. Spoiler alert: nothing … continue reading →
It’s been a while since we took a big picture look at VIX. Since it reached levels not seen since the GFC yesterday, this seemed like as good a time as any. VIX is an interesting instrument. Once a reliable measure of volatility in the market, it was used by many to hedge risk. As … continue reading →
Big storms are always scary. But, it’s usually the day after when we get the chance to assess the damage and count the casualties. So, here we are. I’ve been yacking about ES 2728 so often and for so long, I’m sure a few of you were starting to tune me out. Yet, the logic … continue reading →