The algos were back at it yesterday, pumping stocks higher via VIX and the USDJPY. Note that VIX dropped back to the TL which it broke below in August.
This brought ES within striking distance of a backtest of its latest H&S Pattern just in time for next week’s CPI data to drop.
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Futures are off moderately in the wake of the ECB’s decision to impose a 75 bps rate hike – its highest ever – on an economy already reeling from spiraling inflation and weakening economic activity.
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Breakouts from well-established falling channels are usually followed by backtests of that channel. This is how bulls put all that nasty bearishness behind them, freeing stocks for another leg up. 
Except, it doesn’t always turn out that way. Sure, ES nailed our backtest target. But will it follow through with a respectable bounce?
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Futures are off about 0.5% this morning as the economic data was somewhat better than expected.
It’s an important juncture for the market, as USDJPY has reached our 139.43 target at the same time that ES is approaching our 3902 backtest target.
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Markets finally got the message. Or, maybe Powell finally put it plainly enough: there will be more pain before the Fed eases.
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Powell threw cold water on the market’s optimistic outlook this morning, suggesting that aggressive tightening will continue.
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Futures are flat after enjoying a modest overnight ramp.
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Yesterday marked the second day in a row of sharp declines in the equity markets following the 200-day moving average backtest and the passing of OPEX.
There’s more where that came from.
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Futures are off sharply this morning, reflecting the lack of support behind the runup to the last two options expirations.
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Looking at the bounce since Jun 16, I can’t help but think of Chuck Yeager’s ill-fated journey into space.
Futures are up very slightly this morning, fixated on maintaining prices through tomorrow’s massive option expiration.
VIX: an excellent example of maintaining an even strain.
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