Algos popped in the past hour on a larger than expected increase in initial jobless claims with the more important NFP due out tomorrow.
But, the more dramatic move has been in oil, with CL reaching our next downside target and RB well on its way to its own.
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Futures are off moderately on the first trading day after what was a torrid November. Bears might take some comfort from the overbought Dow, which has reached Fibonacci and channel resistance.
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SPX and ES got all the way up to their SMA200s – the most significant overhead resistance – on yesterday’s vol collapse. Last night, an additional 4% smackdown in VIX put ES over its SMA200.
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Futures are up moderately on positive earnings reports from several key equities.
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There’s some good research on marketwatch.com this morning that illustrates the fact that no interest rate inversion (10s1s) in the past 70 years occurred without a subsequent recession. The average lag was about 14 months, meaning that we’re now officially overdue.
Furthermore, none of the post-inversion equity rallies lasted. Every single one was completely reversed, resulting in a bear market. Food for thought.
It’s another quiet morning so far, with futures flat for the most part after testing our 20-day moving average target yesterday.
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Futures have slipped about 10 points on quiet trading.
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In our last major analysis of COMP [see: Oct 13, 2022 Update] we noted that COMP hadd reversed within 1% of our upside target in 2021 and had subsequently dropped to within 0.3% of our 10,122 target.
Since then, it’s been a battle. COMP finally rebounded to our 13,873 target at the yellow .618 Fibonacci retracement…only to reverse at the .707 Fib at 14,418. Since then, it has been on a wild ride, giving up 2.7% yesterday after failing to break back above its 50-day moving average.
Its rebound at its Aug 2022 highs was so convincing, we had our doubts as to our 12,828 downside target. It’s now looking like a distinct possibility again.
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Futures are up 0.40% largely on bullish algo positioning…
…with VIX now down 13.4% since Friday’s 200-day moving average tag.
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VIX’s constant slide has been one of the best indicators of the runaway bullishness over the past 10 months. Over the past week, however, it has soared to new highs, reaching our 200-day moving average target well ahead of schedule. 
What does it portend for equities?
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As far back as May 11, our charts called for BTC to revert to the pink channel bottom – which at the time was around 22,200 and awful darned close to the 200-day moving average.
June rolled around, and the downside forecast still made sense at 24,000ish – even after BTC whiffed during that slide.
It looked every bit as logical (though our patience was wearing thin) at the end of July at about 26,000.
But, we had to wait all the way to Aug 17 to see our forecast pay off with a winning number of 26,266.
Sometimes, charts work that way. You might get what you want, but only after exercising extreme patience. Go figure.
