pebblewriter

Tag: Channel

  • Charts I’m Watching: Jan 17, 2025

    Futures are up moderately ahead of housing data on a continuing pullback in interest rates.

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  • Charts I’m Watching: Dec 2, 2024

    Futures are flat as we enter the final month of a pretty solid year.

    Questions remain, however, regarding the economy’s ability to withstand the coming policy changes.

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  • Charts I’m Watching: Aug 27, 2024

    Futures are off moderately following yesterday’s reversal, the 6th session in a row that ES failed to surpass its .886 Fib retracement.

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  • Update on Gold and Silver: Aug 20, 2024

    In our last dedicated Update on Gold and Silver in April, we noted that gold had reached our Fibonacci target of 2466.50 but could have further to go.

    GC is fairly straightforward. There’s a large IH&S pattern which completed around Mar 7 targeting 2557, a short distance above the white 1.618 at 2466.50.

    GC reached 2557 this morning.

    It’s interesting that it’s reaching overhead resistance at the same time as SPX and at the same time that DXY has reached our next downside target.

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  • Stagflationary Data…Again

    Futures are off sharply on a very stagflationary offering of economic data. Q1 GDP rose at only 1.6% versus expectations of 2.4%, while core PCE prices rose 3.7% against expectations of 3.4%. The PCE index itself is due out tomorrow.

    Meanwhile, the Labor Department reported that unemployment claims for the week ended April 20 came in at 207,000 versus 215,000 expected and the 212,000-222,000 which have been reported in the past 6 weeks.

    Weaker than expected economic data, combined with stronger than expected inflation and employment, places the FOMC in a difficult position and a market which has been counting on lower interest rates downright bearish.

    Despite a strong showing in March, the SPX is right back where it was the last time we wrote about stagflation in February [see: Stagflation Fears Renewed.]

    About the only silver lining in our charts is the 10Y, which has reached our 4.738 target several weeks earlier than expected. The resistance at this level could make a difference for stocks.

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  • Charts I’m Watching: Apr 22, 2024

    Futures have regained about 30 points after last week’s drubbing.

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  • Tit for Tat

    Futures tanked overnight on news of Israel’s rocket attack on Iran, only to recover all their losses as we go to press. The latest retaliation is being characterized as a tit for tat.

    But it’s easy to imagine the Plunge Protection Team working overtime to calm markets by hammering VIX and WTI back down from their overnight highs.

    Meanwhile, SPX came within 1.89 of our 5,000 target yesterday, testing support that continues to be quite important.

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  • PPI: Lower Than Expected

    In contrast to yesterday’s CPI print, PPI came in below estimates at 0.2% headline and core. Futures erased their sharp overnight losses which saw them nail our next downside target and now point to modest gains.

    A bounce here would be more convincing if SPX were to also reach its 50-day moving average.

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  • Breakdown/Breakout

    In a repeat of the most effective algo move of the past 10+ years, VIX broke down following the Fed’s no-news rate decision and press conference yesterday.

    As always, this allowed equities to leapfrog an area of stubborn overhead resistance. continued for members… (more…)

  • Hey Fed: You Break It, You Fix It

    In his January press conference, Fed Chief Jay Powell accepted some responsibility for the sharp rise in housing prices during the pandemic.

    “We’re also well aware that when we cut rates at the beginning of the pandemic, for example, the … housing industry was helped more than any other industry.”

    This statement implies that, were it not for the pandemic, the current inflation picture wouldn’t be burdened by sticky, elevated housing prices. But, that’s just not true. The problem developed long before anyone heard of COVID-19. During both the 2000-2003 recession and (especially) the 2007-2009 recession, the Fed slashed interest rates in order to save the housing market from steep price slumps. The Fed’s belief that it could eliminate the natural cycles which have always existed in our economy ultimately led to even worse fluctuations. The current housing crisis was brought on by fifteen years of historically low interest rates – not just the pandemic rescue.

    Now, the Fed says they don’t have the tools to fix the problem they created. That much is probably true. Runaway prices usually require a recession to bring them back to trend. But, the least the Fed could do is own up to the problem that they themselves created.

    Futures are off moderately, testing the 10-DMA as we approach the open. But, of course, VIX hasn’t been hammered back below its 200-DMA yet.

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