pebblewriter

Tag: SPX

  • Amazon: Can it Keep Delivering?

    AMZN stock cares about its 200-day moving average. In fact, it cares a lot. When it pushed above its 2903 Fibonacci target in late 2020, it spent 8 months waiting for the SMA200 (the thick red line below) to arrive and another 11 months defending it. When it finally broke down in January 2022, it began a plunge that ultimately exceeded 50%.  Since January 2023, it has recovered nicely, clawing back above the SMA200 to the midline of the channel that dates back to the year 2000.But, this leaves it at its 200-week moving average and overbought amidst negative divergence while long overdue for a backtest of its 200-day moving average. A backtest from current prices would amount to about 20% – though the SMA200 is on the rise.

    It should be noted that AMZN has been more volatile than the overall market. But, it’s not hard to imagine a sharp decline in the third largest component of the S&P500 leaving a mark on stocks in general.

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  • Powell Doesn’t Disappoint

    He could have gone full hawk, but he didn’t. Even in the face of economic data (that the rest of us can now see) which was uniformly positive and a coming bump in inflation, Powell chose the route that best supported stocks. ES bounced at its SMA10 and is surging toward its .886 Fib retracement.

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  • FOMC Day: Jul 26, 2023

    Equities have ramped almost 12% since the last Fed meeting – ignoring the prospect of higher interest rates for a longer period of time. Given the oil market’s recent breakout and the obvious base effect on inflation, we see a good chance of Powell presenting a more hawkish stance than the overbought market is prepared for…

    …raising the prospect of spike in the 10Y to 4.76% by mid-August. One of the few developments that could prevent it: a collapse in oil/gas prices.

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  • Forcing Their Hand

    The recent breakout in oil/gas prices has now inspired a breakout in the 10Y.

    It’s an important headwind for the Fed, which had relied on falling energy prices to keep inflation and interest rates at an acceptable level.

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  • Inflation Not Done

    We might be done with inflation, but judging by the oil/gas markets, it’s not done with us. Both CL and RB have now broken out of channels dating back to early 2022 – with CL pushing above its 200-day moving average this morning.

    The Fed has its work cut out for it this week – and for the next several months.

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  • Charts I’m Watching: Jul 21, 2023

    Just saw that the great Tony Bennett passed early this morning. It was always a thrill to see him perform. He was one of the last great ones, and will be missed.

     * * * * *

    Futures are leaking higher on this OPEX Friday following SPX’s bounce off its .786 Fib.

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  • OPEX Eve

    Futures are sagging after powering through another key Fibonacci level. At this point, the only question is whether or not we see a backtest.

    With OPEX coming up tomorrow, it’s unclear whether we could get a full backtest of the .786 at 4534.63.

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  • Update on Currencies: Jul 18, 2023

    EURUSD tagged our 1.1273 target overnight. It came a little earlier than expected, but it’s a significant development given the pair’s correlation with stocks.continued for members… (more…)

  • Charts I’m Watching: Jul 17, 2023

    Futures are off slightly on low volume on a slow news day.

    Some significant Fibonacci levels have been reached, however, setting up potential large moves in equities.

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  • Stagflation Data

    With CPI due out tomorrow, we should see confirmation of how behind the curve the FOMC continues to be. Whether or not the data comes in above estimates, it will still be well above the Fed’s professed target of 2% – meaning the pause was yet another mistake served up in the interest of propping up equity markets.

    Just a reminder: with CPI around 4% and GDP below 2%, we’ve got stagflation. And, the Fed has no answer for that.

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