In yet another reminder of their sway over the markets, the algos have brought stocks to the brink of a breakout by putting VIX at the brink of another breakdown.
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Tag: DXY
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Algos: Ready for FOMC
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Charts I’m Watching: Oct 31, 2022
Futures are off about 0.50% as we approach Wednesday’s FOMC decision and a slew of important economic data.
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Q3 GDP Beats Estimates
Q3 GDP came in at 2.6%, beating the 2.3% consensus and of course Q2’s -0.6%. While good news for the economy, it does little to advance the narrative that the Fed might be ready to pare future rate hikes.
Nevertheless, VIX fell…
…so futures rose slightly on the news.
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Decision Time
ES rallied 7.3% off the Oct 13 lows to tag our target at the white channel midline – also the 20% correction mark.
This is the same target we added on Oct 14 [see: It Wasn’t Oversold] as it’s an important line in the sand.continued for members… (more…)
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Another Good News is Bad News Story
Unemployment claims came in lower than expected, further dashing the hopes of those praying for a Fed pivot. Meanwhile, the OPEX levitation continues.
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Charts I’m Watching: Oct 17, 2022
Pretty standard fare for an OPEX week…futures have ramped 1.6% higher on a bounce in USDJPY and CL and a trounce in VIX.
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Our Analog: Then and Now
Futures have been all over the map this weekend following the breakdown of the small white flag pattern on Friday. But, the key factor is that VIX is higher and should experience a golden cross as we approach PPI tomorrow and CPI on Thursday.
Our downside targets remain unchanged with SPX now within a few percent of our analog’s target from this past May [see: Analog Watch.]continued for members… (more…)
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A Jobs Report That Matters
The thinking goes like this: a strong jobs report is bearish for stocks because it might delay the Fed’s eventual pivot; while, a weak report would be bullish because it might accelerate the Fed’s pivot.
The futures are on the fence, but not for long.
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OPEC’s Party Was a Bust
OPEC+ threw the party they said they would. Everyone was talking about it. But, nobody came.
CL and RB had already celebrated in the days leading up to the meeting and we were left with a non-event with CL stuck at a channel top and RB slamming into its 50-day MA. Might there be an after party?
It matters because the 10Y is in a dicey position – bouncing off its TL, but without a clear engine for more upside.
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All Eyes on OPEC+
If the enemy of my enemy is my friend, is the friend of my enemy my enemy? The relationship between the US and the Saudis has been through plenty of ups and downs, but it’s been years since it was as fraught as it is now.
The West is trying to put the screws to Russia, which in turn is trying to put the screws to the eurozone by enlisting the help of the Saudis, who are arguably US allies… Around and around it goes, with a decision due out later today that might spell a 2MM bpd (about 2%) cut in production.
Will it be enough to revive the correlation between oil/gas prices and interest rates? ES is positioned to at least backtest its SMA10.
Stay tuned.continued for members… (more…)
