In a CNBC interview this morning, Fed President Jim Bullard said “Our credibility is on the line here…” Anyone paying any attention to the Fed knows that that ship sailed a long time ago.
Futures have been all over the map, down as many as 55 points before VIX was hammered following a false news report regarding the situation in Ukraine.
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This is all it took to get FOMC members to walk back Bullard’s hawkish comments. Note the tiny channel breakdown. Terrifying enough to keep QE going and to respond to the worst inflation in 40 years with a mere 25 bps rate hike a month from now? Apparently.
How else can you explain this insanity?
If it’s too hard to see the Fed Funds rate on the above chart, here’s a close up.
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January headline CPI reached 7.5%, a new 40-yr high, sending the 10Y up over 2% for the first time since August 2019 when CPI registered 1.75%. As has been the trend since November, oil/gas no longer leads the way.
Inflation has become widespread, higher than the Fed’s so-called 2% target in every category except, ironically, medical services. Energy was the only category showing a negative MoM change.
Futures are off over 40 points so far. If not for the ramp job of the last few days, ES would be back below its 200-DMA. It’s the markets version of raising prices so you can advertise a huge sale.
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Futures are off modestly as we approach the open. Aside from a few formerly shiny objects…
…all eyes are on Thursday’s CPI.
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Futures are up slightly as we approach the open – an extension of the bounce off recent lows.
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Futures are off sharply overnight on Facebook’s sensational plunge.
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COMP’s breakdown caught a lot of people by surprise (though thankfully, not everybody.) Likewise, its bounce has turned more than a few heads. As it approaches a backtest of its channel line and SMA200, what can we expect? And what does it mean for the broader market?
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SPX has been threatening to break back above its 200-day moving average ever since Jan 23. Despite numerous vigorous attempts, it remains below it, signalling more downside ahead.
It’s time for the bears to put up or shut up.
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Futures have been all over the map, but ES’ flag pattern is still intact. All of our targets remain unchanged. Look out below.
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After Monday’s tumble, will Powell have the guts to stick to his inflation-fighting guns? Futures are up about 1.5%, but are still just shy of the 200-day moving average.
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