pebblewriter

Tag: BTC

  • PPI Soars, CPI on Deck

    Producer Prices for Final Demand in October jumped 0.6% MoM and 8.6% YoY (6.2% less food, energy and trade.)Futures were little changed… …though the 10Y slipped to a cycle low of 1.43%.

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  • Out of Sync

    SPX tagged a significant Fibonacci extension Friday, but ES came up short of its equivalent target at 4728. Meanwhile, CL is faltering and USDJPY is rolling over as VIX faces a bullish 10/20 cross. What does it all mean?

    Surprisingly, the answer might lie with the bond market.

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  • Charts I’m Watching: Nov 5, 2021

    The 531K payrolls beat and Pfizer COVID-19 pill could influence the taper schedule. The 4.9% increase in wages should.

    Energy and food prices might well fall over the coming months. But, wages are sticky. Whether due to contracts, minimum wage rules, or just market forces, they are very difficult to reduce. While it’s true that workers need higher wages in order to keep up with spiraling cost inflation, this is undoubtedly more fuel for the non-transitory inflationary fires.

    Futures are up sharply on the news, which has the factors wondering what to do at ES 4700. Having delivered stocks (with a few trillion in help from the Fed) to all-time highs despite lackluster and occasionally bad news, what should they do with really good news that might speed up the taper?

    Stay tuned.

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  • The Countdown

    It’s easy enough to engineer a meltup in advance of a Fed meeting. We’ve seen it countless times. But, what about after a meeting, particularly one where an actual taper or rate hike is announced? The countdown has begun. Stay tuned.

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  • The Big Picture: Oct 27, 2021

    Equity markets rarely fail to rally into the end of the year.  But, there have been several noteworthy Q4 exceptions over the years, each of them marked by VIX’s bounce off well-established trend lines.

    Note that SPX’s yellow channel has been rising at a compouned 12.2% per year since the 2009 bottom – historically a very decent rate of return.  With SPX currently testing the channel top as VIX tests the rising purple trend line, SPX is at a critical juncture where it must either correct or break out.

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  • Charts I’m Watching: Oct 21, 2021

    Futures are off slightly this morning, passing on the opportunity to make new highs in the after-hours.

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  • Buying the Dip?

    Futures are up moderately this morning, bouncing 60 points from their midnight lows on a retreat in VIX. Note that it wasn’t a collapse – the usual response when a rally is resuming.

    This lack of algo baiting occurred yesterday, too, when ES completed a Head & Shoulders Pattern and backtested it in a fashion that was reminiscent of the old days, when central bankers didn’t “fix” every little dip.

    This highly unusual restraint suggests this dip shouldn’t be bought, but is the next stage of a scripted correction we warned about several weeks ago [see: Correction Watch.]

    Our downside case remains intact, with an even more bearish Head & Shoulders Pattern up next.

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  • Powell Doesn’t Disappoint

    Futures nailed our 4424 target overnight. Most will attribute it to Powell’s (completely unsurprising) resolve to support the economy the stock market. But, we know that the algos were spurred into action by VIX’s drop back into the falling channel from Mar 2020 and its dip below its 200-DMA.

    Remember, it ain’t over till it’s over. Follow this headfake at your own peril.

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  • Equities Plunge on Loss of Algo Support

    Futures reached our next downside target earlier this morning, the Fibonacci retracement at 4348 we added on Sep 9 [see: Just Don’t Call it a Taper.] ES is now off 4.6% since recent highs and 4% since our Correction Watch on Sep 8.

    The algo factors, which have propped up stocks for months, are positioned for further losses following their realization that a bounce at the 50-DMA is not guaranteed.

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  • Because They Can Can Can

    Watching the “market” melt up and bonds barely budge in the face of all-time highs in the monthly and annual PPI print…  More grist for the Fed’s “transitory” inflation scenario.

    Inflation is no longer dominated solely by soaring oil/gas prices.  In other words, not transitory.Will the party end? Not as long as the Fed can control volatility and interest rates – which are, for now at least, ignoring reality. Tomorrow’s another day…

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