It was more of a red ripple than a red wave. So far, it appears that Republicans will hold a five seat majority in the House and might actually lose ground in the Senate. Futures are moderately lower.
continued for members… (more…)
Tag: inflation
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The Day After
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Waiting on CPI
More of the same…perhaps until CPI comes out on Thursday.
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FOMC Day: Nov 2, 2022
The market is essentially unchanged from yesterday, with VIX in a position to make or break this rally unless the FOMC delivers a significant surprise.
We’ve seen this movie before: a sharp rally into a Fed meeting or CPI report that wipes out the put buyers and positions the market for a drop from a higher price level once the disappointing news is delivered.
There is widespread expectation of a 75 bps hike, but less agreement about whether the FOMC will be as dovish as the market’s latest rally would suggest.continued for members… (more…)
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Algos: Ready for FOMC
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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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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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.
continued for members… (more…)
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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…)
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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 squeezerally follow the same playbook?continued for members… (more…)
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VIX at a Crossroads
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.
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Losses Accelerate
Futures are off sharply this morning as important support for various instruments/indices/currencies begins to break down.
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