Just because we’re seeing an economic slowdown amidst very high inflation in a Fed tightening cycle against the backdrop of a war that could draw the US into armed conflict…doesn’t mean the market has to react rationally. Stocks were up sharply yesterday because they’re still driven largely by algorithms. And, yesterday, the algos were focused on … continue reading →

Should We Fear a Yield Curve Inversion?

It seems like everyone’s talking about the yield curve. Will it invert? If so, when? Would it imply or even precipitate a recession? How would it affect Fed policy? What would it mean for the stock market? Since our work focuses on forecasting markets, let’s set aside for the moment whether an inversion means a … continue reading →

Update on USDJPY: Mar 14, 2022

USDJPY reached our 118 target overnight. We charted this target over a year ago [see: USDJPY’s Turn] following USDJPY’s breakout from the falling purple channel [see: The Usual Suspects], reasoning that the Bank of Japan would ramp up the yen carry trade in order to support the Nikkei’s breakout. The BoJ rarely disappoints, and they … continue reading →

War…What is it Good For?

Absolutely nothing?  Well…vol came under pressure again last night despite the recent 10/20 cross and obvious escalation in risk of military action in Ukraine. Apparently the threat of war is good for stocks. Nevertheless, the futures heard and obeyed and continue to eye the VIX breakdown threat which works more often than not.continued for members… … continue reading →

The Ukraine Crisis Worsens

Russian troops entered Eastern Ukraine following its formal recognition of the two separatist regions, marking an escalation in the seriousness of the Ukraine crisis.  Futures fell over 94 points from Friday’s close before the algos kicked in and are now down less than 10 as we approach the open. continued for members… … continue reading →

Bullard Speaks

In a CNBC interview this morning, Fed President Jim Bullard said “Our credibility is on the line here…”  Anyone paying any attention to the Fed knows that that ship sailed a long time ago. Futures have been all over the map, down as many as 55 points before VIX was hammered following a false news … continue reading →

CPI Reaches New 40-Yr High

January headline CPI reached 7.5%, a new 40-yr high, sending the 10Y up over 2% for the first time since August 2019 when CPI registered 1.75%. As has been the trend since November, oil/gas no longer leads the way. Inflation has become widespread, higher than the Fed’s so-called 2% target in every category except, ironically, … continue reading →

COMP’s Moment of Truth

COMP’s breakdown caught a lot of people by surprise (though thankfully, not everybody.) Likewise, its bounce has turned more than a few heads.  As it approaches a backtest of its channel line and SMA200, what can we expect? And what does it mean for the broader market? continued for members… … continue reading →