Breakdown/Breakout

In a repeat of the most effective algo move of the past 10+ years, VIX broke down following the Fed’s no-news rate decision and press conference yesterday. As always, this allowed equities to leapfrog an area of stubborn overhead resistance. continued for members… … continue reading →

FOMC Day: Mar 20, 2024

Markets are at all-time highs as we await the FOMC’s latest decision on interest rates. Note that we’re going on 21 months of a yield curve inversion, the longest since August 1978 to May 1980. Interestingly, the market was flirting with new, all-time highs back then as well. Also interesting, that was one of many … continue reading →

PPI Comes in Hot, Too

February PPI came in at twice expectations: 0.6% versus 0.3%.  In a replay of the CPI print, stocks dipped for a few seconds before resuming their overnight ramp as algos were more focused on VIX dropping through its 50-DMA just in time for OPEX. VIX did pop above the 50-DMA…for several seconds. It got better.Indicators … continue reading →

On the Brink, Again

The last time VIX cratered to below its 50-day moving average in two days, ES popped over 3%. Then, as now, SPX had committed the egregious sin of dipping below its 10-day moving average as it approached important Fibonacci resistance. The difference, now, is that SPX is on the brink of a breakout above that … continue reading →

On the Brink

As we stated in yesterday’s update… …the downside case would be damaged considerably if NVDA were to come out with stellar earnings and outlook that boosted ES back into the rising yellow channel. NVDA’s stellar earnings and outlook did, in fact, boost NVDA back into its previously broken channel. The resulting algo spasm, however, boosted … continue reading →

Stagflation Fears Renewed

January PPI came in much hotter than expected while housing starts and permits fell far short of consensus, stoking persistent fears of stagflation.  PPI came in at 0.3% MoM versus 0.1% expected.  Excluding food and energy, core PPI rose 0.5% versus 0.1% expected. Stripping out trade services, the tally rose to 0.6%, its highest print … continue reading →

NFP Soars

Nonfarm payrolls soared by 353,000, more than twice the 175,000 expected. Average hourly wages also beat at +0.6% (+4.5% YoY) versus +0.3% expected. Unemployment remained at 3.7%. Forget about a March rate cut. Bulls will be lucky to get one in May. The overnight ramp job has completely disappeared, with futures struggling to remain positive.  … continue reading →

No Pivot, No Punch Bowl

Powell said what many of us have been thinking: There’s no reason to rush into a rate cut. The part he didn’t say (but implied) was that there was a clear risk to cutting rates at this time. The market, which has been fueled for months by rate cut expectations, was quite disappointed. SPX shed … continue reading →