ES is up 1.3% in the past week. All it took was a 15% beatdown in VIX.
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Posts
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Charts I’m Watching: Apr 17, 2023
VIX came within .01 of its previous lows on Friday…
…leaving plenty of doubt as to the algos’ next move. Today, we should see some resolution as moving averages start to roll over.
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Retail Sales Slip, VIX Warns
March retail sales came in at -1.0% versus -0.4% expected and -0.2% previous. Core slipped 0.3%. Early reaction is that the drop wasn’t enough to forestall another rate hike in May. So far, the futures have taken the news in stride.
But, it remains to be seen whether the algos will view the setup as positively. VIX’s previous bounces off the TL from Jan 2018 have been tough on stocks.
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PPI Echoes CPI
After closing below its 10-day SMA for the first time in a month, ES is backtesting it…
…on the back of PPI data that essentially echoed yesterday’s CPI print. Headline PPI crashed to 2.7% YoY and -0.5% MoM. Though stripping out food and energy, core PPI fell only 0.1% MoM and increased 3.4% YoY.
As we discussed yesterday, 80% of the MoM decline was due to the sharp drop in gasoline prices.Also out this morning, credit portfolio managers agree with the Fed’s assessment that the economy is headed for recession. It’s a troubling backdrop as we enter earnings season in the midst of a credit crunch.
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Core Tops Headline CPI
For the first time in over two years, core CPI topped headline. Core, which ignores food and gas prices, climbed 0.4% MoM and 5.6% YoY, while headline came in at 0.1% MoM and 5.0% YoY.
Not surprisingly, futures jumped at the news that headline CPI had dropped. But, our charts still show an important risk just ahead.
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CPI on Deck
Futures are flat this morning as algos continue to follow the VIX suppression playbook.
With CPI and Fed minutes coming out tomorrow, PPI and initial claims on Thursday, and retail sales and Michigan sentiment on Friday, the remainder of the week is unlikely to be as quiescent.continued for members… (more…)
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Charts I’m Watching: Apr 10, 2023
We’re finally getting the SMA10 backtest this morning.
Better late than never.continued for members… (more…)
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Rinse and Repeat
The March jobs report came in at 236,000 versus 230,000 expected. Headline unemployment dipped slightly to 3.5%.
Futures bounced slightly on the back of algos which were focused on the nightly VIX meltdown.
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Jobless Claims Pile On
Job cuts rose to 228K (vs 200K expected) last week. It will officially register as a drop, however, as the previous week was revised from 198K to 246K. When viewed through the prism of new highs in bankruptcies and an earnings implosion…
…it’s not too surprising that futures are drifting lower.
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ADP Misses
March ADP payrolls came in at +145K versus +210K estimates, strengthening the stagflation/recession argument.
Futures have drifted lower following yesterday’s sharp decline, suggesting at least a channel bottom/10-day SMA backtest. Keep an eye out for ISM services coming out at 10ET.continued for members… (more…)
