pebblewriter

Tag: COMP

  • Productivity: Worst Since 1947

    The first quarter decline in non-farm productivity was the largest since 1947. The chart below from briefing.com shows the 7.5% plunge, contrasted with an 11.6% increase in unit labor costs. If the country had locked down during this time, you might be able to make an argument that a recession isn’t necessarily coming. But, this slowdown came courtesy of a 2.4% output decrease. In other words, it’s another reason to believe a recession is here and a soft landing ain’t in the cards.

    Futures have been all over the map overnight, but are currently hanging on to the channel bottom from May 20. Note that we finally got that 10/20 cross and are nearing a backtest of the 50-day moving average – just in time to set up a nice trap.

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  • Charts I’m Watching: Jun 1, 2022

    Futures are moderately higher this morning as algos respond enthusiastically to Salesforce’s earnings and ignore the ongoing meltdown in mortgage applications and uptick in COVID cases.  Here’s a snapshot of testing results at my daughter’s college, which finally reinstated a mask mandate after the positivity rate reached 10%.

    I think they could use a primer on chart reading…

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  • Inflation Update: PCE

    PCE comes out later this morning, providing the most up-to-date picture of the challenge facing the Fed. Judging from yesterday’s 2% pop, investors are hopeful that inflation might be leveling off. Futures are off very slightly.

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  • A Crucible Moment

    The Information reports that Sequoia Capital has issued a warning to its startup founders, detailing a series of moves that should be taken to avoid a “death spiral.”

    “Its latest warning to its portfolio companies takes the form of a 52-slide presentation, a copy of which was viewed by The Information. Sequoia described the current combination of turbulent financial markets, inflation and geopolitical conflict as a “crucible moment” of uncertainty and change. Sequoia told founders not to expect a speedy economic bounceback akin to what followed the start of the pandemic because, it warned, the monetary and fiscal policy tools that propelled that recovery “have been exhausted.””

    Sitting here in Silicon Valley today, where one bedroom shacks still fetch $1.5 million despite sliding tech stock prices, it’s not hard to imagine that the worst is yet to come.

    Futures are up modestly this morning, with our analog still on track.

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  • Charts I’m Watching: May 23, 2022

    Futures are up sharply following Friday’s 140-point reversal which finally saw SPX/ES reach the -20% mark. As we discussed last week, the market should surprise many this week.

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  • Sure OPEX, But Then What?

    Futures are up about 1% this morning – par for the course for an options expiration Friday. The Chinese prime rate cut is no doubt helping.

    But, what happens next week as new and pending home sales, durable goods, FOMC minutes, GDP, PCE and Michigan Sentiment come rolling in? This will be a serious test of the market’s ability to hold its lows, let alone continue to bounce.

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  • The Big Picture: May 12, 2022

    SPX closed below important support yesterday, suggesting that the current leg down isn’t yet over. Indeed, things could get worse.continued for members… (more…)

  • Bitcoin’s Meltdown

    BTC reached our next downside target at 28,600 last night, then dropped as low as 25,401 before bouncing back to current levels.

    It’s not unusual for BTC to overshoot important support. And, this .618 Fib level is theoretically important support. But, it’s also important to remember that a bounce is sometimes just a backtest of newly formed resistance before another leg down.

    We’ve been bearish on BTC since 66,432 in October 2021. We were a little early, but maintained our posture ever since with with the exception of the Dec 2021 and Jan 2022 bounces – a stance which has produced exceptional gains.

    We’ll take a fresh look at BTC and whether it’s worth trying to catch this falling knife.

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  • A Swing and a Miss

    ES spent 11 hours hanging around our next downside target yesterday.  While the session had many characteristics of capitulation, the fact that SPX didn’t quite reach significant support (3956) suggests that the overnight ramp is a head fake.continued for members… (more…)

  • Update on COMP: May 9, 2022

    COMP just tagged our 11,643.40 target. Recall that it was added to our charts in January [see: Jan 10, 2022 Update] after we turned bearish on November 19.

    It was a fairly precise forecast. Then……and, now.

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