Mixed Messages

Futures bounced off our 50-day MA target and are up sharply on NVDA‘s blowout earnings/forecast, egged on by Speaker McCarthy’s latest promise that a debt ceiling resolution is on the way. Of course, this bullishness is unwarranted from a Fed rate hike perspective. Initial claims came in below expectations and Q2 GDP (the deflator was … continue reading →

Stocks vs Bonds

The OPEX meltup continued overnight, with futures up modestly to new 9-month highs. Powell speaks at 11am ET and might shed some light on the implications of treasury yields which have pushed to new cycle highs – reflecting a much more cautious assessment of the debt ceiling negotiations. continued for members… … continue reading →

Jawboning an OPEX Rally

Yesterday’s 1.2% spurt higher was driven not only by the usual push in USDJPY and plunge in VIX, but a healthy dose of hopium regarding the debt ceiling crisis. Congressional and White House reps were nearly unanimous in declaring that a deal is as good as done. Whether they’re speaking the truth or simply trying … continue reading →

End of the Line?

The market has frustrated both bulls and bears lately, vacillating between sharp downturns and even sharper recoveries. But, a close examination of the charts shows two very obvious patterns that suggest the tide is about to turn – not in a good way. continued for members… … continue reading →


Futures are off modestly after a more hawkish Q&A with Powell than many expected. ES came within a few points of the 50-day yesterday. Based on the overnight action, it should reach our next downside target with ease. It didn’t help that unit labor costs shot up 6.3% for April versus the 3.3% prior and … continue reading →

FOMC Day: May 3, 2023

Futures are essentially flat ahead of today’s pivotal FOMC decision and press conference.  This follows a day that saw stock prices plunge below our initial backtest target……as VIX actually broke out – at least for a few hours. The banking crisis obviously hasn’t gone away. How many more First Republics or Silicon Valley banks are … continue reading →

Q1 GDP Disappoints

GDP increased at an annual rate of 1.1% versus expectations of over 2% and Q4’s 2.6%, fueling both recession fears and expectations that the Fed will soon halt rate hikes after next week’s 25 bps increase. Futures dipped on the news but have since rebounded as the usual VIX smackdown convinced algos to look on … continue reading →

PPI Echoes CPI

After closing below its 10-day SMA for the first time in a month, ES is backtesting it……on the back of PPI data that essentially echoed yesterday’s CPI print. Headline PPI crashed to 2.7% YoY and -0.5% MoM. Though stripping out food and energy, core PPI fell only 0.1% MoM and increased 3.4% YoY. As we … continue reading →

Powell’s Testimony

Bottom line, a 50 bps rate hike is back on the table. We got the backtest we expected, and even a little bit more. This morning’s ADP employment report further underscores the need to put the brakes on the economy. It will be interesting to see whether Powell’s tone becomes any less hawkish in light … continue reading →

The Big Picture: Feb 27, 2023

Last week completed the backtests we’d been expecting, with ES, SPX, COMP, DJIA and NKD all holding important technical support.While the fundamental picture might not justify these prices, the algos are satisfied. And, until price discovery reemerges (if it does), the algos are all that matter. continued for members… … continue reading →