pebblewriter

Tag: H&S

  • Debt Ceiling Worries

    We’re starting to see cracks in the equities and bond markets related to the debt ceiling. Interest rates are ratcheting higher. And, although OPEX-related maneuvers are working to prop up stocks, we had a momentary breakdown in SPX yesterday.

    Utilities, a bond proxy for some, have taken a big hit this week as investors shift into shorter-term, less volatile treasuries.

    Which would you rather own, XLU with a beta of .56 and yield of 3.01% or a 6-mo Tsy paying 5.25%?

    continued for members… (more…)

  • Jobless Claims Pile On

    Job cuts rose to 228K (vs 200K expected) last week. It will officially register as a drop, however, as the previous week was revised from 198K to 246K.  When viewed through the prism of new highs in bankruptcies and an earnings implosion… …it’s not too surprising that futures are drifting lower. continued for members… (more…)

  • Charts I’m Watching: Apr 4, 2023

    After reaching our next upside target, futures have settled into a pause.

    No surprise, as the algo factors are doing the same.

    continued for members… (more…)

  • On the Bubble

    Our yield curve model sounded the alarm on Friday. But, by the end of the day, it had backed off and cooler heads prevailed.

    It’s important to recognize, however, that it remains on the bubble, with only a few basis points standing between a rally and another leg down. From a fundamental standpoint, there seems little doubt that the odds of a recession are on the rise.

    continued for members… (more…)

  • 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 of yesterday’s sell off.

    continued for members… (more…)

  • Fed Whispering

    The FOMC’s meeting gets underway today. Like most, this one seems very consequential. The Street is divided on whether or not the Fed has done enough to combat inflation as well as the necessity of a recession.

    continued for members…

    (more…)

  • VIX: Not a Coincidence

    When COMP bounced at 10,572.33 on Friday, a mere 7.19 above its June 16 lows, it might have struck some as a coincidence.  It wasn’t.

    It was a well-coordinated effort to ensure that new lows were avoided – at least for the time being.The usual culprit: VIX.  For the 6th session in a row and the 12th time since Jan 24, 2022, VIX tested and retreated from the same trend line – an occurrence the algos have been well trained to respond to with a bounce.  The June 13 test went further, producing a huge bounce because it also broke below two significant trend lines of support as well as producing a bearish (bullish for stocks) alignment in moving averages.

    Yesterday’s huge plunge in VIX similarly wreaked havoc with moving averages – postponing (at least) an imminent 50/200 cross.  Will this short squeeze rally follow the same playbook?

    continued for members… (more…)

  • Fed Meeting on Deck

    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 Head and Shoulders Pattern

    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…)

  • Charts I’m Watching: Sep 15, 2022

    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…)