For months, VIX has facilitated higher equity prices – plumbing new lows, breaking down, refusing to rise in cases of obvious market distress. Today, it reached a trend line off the previous highs, all of which corresponded with sizeable bounces in the equity markets. It’s an extremely important test for bulls.
continued for members…
It’s unusual for stocks to sell off in the lead up to an FOMC meeting. Its also unusual for a bearish pattern such as a Head and Shoulders pattern to complete during those days. Yet, here we are.
As has been the case since late August, the only thing preventing a severe downturn (aside from the hope that the Fed will suddenly change course and be less hawkish) is VIX – which keeps getting smacked down every time it reaches 27-28.
continued for members… (more…)
Another ugly open for markets as ES, down about 1.25%, completed its H&S Pattern we’ve been watching take shape.
More grist for the bearish mill…as though we needed any more.
continued for members… (more…)
After that vicious selloff, the market is now in wait and see mode – levitated by OPEX this Friday and next week’s FOMC meeting.
continued for members… (more…)
Apparently, investors aren’t quite as sanguine about inflation as it seemed. After slightly overshooting our upside target from February, SPX plunged 4.32% – about $1.5 trillion in market cap. Trillion-and-a-half here, trillion-and-a-half there, pretty soon you’re talking real money. It was the worst day in the markets since March 2020 and one of the worst on record.
Yet, the talking heads and financial press were all rainbows and unicorns leading up to the CPI print. The big question, of course, is “what happens next?”
continued for members… (more…)
August CPI came in hot, rising 0.1% in August instead of the consensus 0.1% decline. Core was even worse: 0.6% versus 0.3% consensus. The annual print also disappointed, coming in at 8.3% versus expectations of 8.0% or less.
Having slightly overshot our 4153 target overnight, ES is now reversing sharply.
continued for members… (more…)
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?
continued for members... (more…)
Markets finally got the message. Or, maybe Powell finally put it plainly enough: there will be more pain before the Fed eases.
continued for members… (more…)
Powell threw cold water on the market’s optimistic outlook this morning, suggesting that aggressive tightening will continue.
continuing for members… (more…)
Futures are flat after enjoying a modest overnight ramp.
continued for members… (more…)
