The Hits Keep Coming

It’s the last day of a short week packed with more important economic data — which the market has managed to ignore so far. Today might be a little different, as the spike in the savings rate and the collapse in consumption confirm a troubled road ahead for the strong consumer narrative.  Gee, could 25% … continue reading →

Inflation Craters

Headline CPI fell 0.8% MoM – the biggest drop since 2008… …thanks primarily to plunging energy prices. Core CPI fell 0.4% MoM, the biggest drop since it began being tracked in 1961. The details show strong upticks in food and medical care but weakness almost everywhere else.Like almost all economic data lately, the algos have … continue reading →

Yield Curve Warning

In a bit of a delayed reaction to Treasury’s announcement of its $3 trillion borrowing needs in Q2, the 2s10s has pushed above the white TL connecting all-time lows – a clear warning, should it last, for equities. Meanwhile, CL backtested its Feb 2016 lows and USDJPY broke down at about the same time that … continue reading →

One Million Coronavirus Cases, Market Oblivious

It’s a day we all knew was coming — over 1 million cases of coronavirus cases officially diagnosed in the US, over 3 million worldwide. Experts such as Scott Gottlieb, former head of the FDA, estimate that actual US cases are 10 to 20 times the reported figure. Deaths currently stand at 56,803 – about … continue reading →

Just Two Charts

Two charts best define the day we had yesterday. First, VIX tagged our next highest target: the intersection of the .786 Fibonacci retracement and the trend line connecting two previous highs. The other one was the SPX arithmetic (as opposed to log) chart, which stopped on a dime at the channel bottom.The bleeding continued well … continue reading →

Burning Down the House

Once upon a time, a few boys whose families owned the biggest lemon groves in town got together and opened up a lemonade stand. It was a very hot summer, so they sold an enormous amount of ice-cold lemonade. Since they controlled the supply of lemons, they were able to quickly raise prices from 10 … continue reading →

Decision Time, Again

We start this morning’s post with a peek at the Russell 2000 as it perfectly illustrates the dilemma facing the broader markets this morning. Up until September 2017, RUT followed a well-defined rising channel shown below in yellow.  Like all channels, it was defined by the tops and bottoms along the way. The only problem: … continue reading →

When Will News Begin to Matter Again?

Apparently AAPL slashing guidance is inconsequential and Bill Gates, who is predicting 10 million deaths, is some sort of conspiracy theorist – because the market continues to ignore the coronavirus story. Perhaps somewhere down the line the investing world will come to realize what we’ve known for years: stocks have become increasingly easy to manipulate. … continue reading →