Rally Faces Another Test

Futures have given up all of Friday’s rebound gains and then some, again testing the IH&S neckline and the bottom of the rising white channel from last March. At the risk of sounding dramatic, a failure of the channel would mark the end of the current rally and usher in the correction suggested by our … continue reading →

CPI: Putting the Brakes On

CPI rose 0.2% MoM in September, half the August rate. It rose 1.4% YoY, slightly higher than September’s 1.3%. Without the outsized gains in used cars and the minor gains in energy (conflicting with the official EIA data), MoM CPI would likely have been negative. This is hardly supportive of the reflation narrative driving equity … continue reading →

More Gimmicks, Higher Highs

More gimmicks, higher highs. It’s getting to be an old story. But, as long as voters and algos don’t know or care, it will continue. Futures were in danger of giving up Tuesday’s 3421.75 highs when VIX suddenly collapsed by 7% in a matter of seconds.When that didn’t immediately result in a sufficient boost, it … continue reading →

Trade Troubles

The trade deal: the gift that keeps on giving. The August trade deficit came in at $67.1 billion, the largest since 2006 – partly a reflection of the pandemic but exacerbated by a 9.3% collapse in the value of the DXY since its March highs. At the same time, oil and gas prices have spiked … continue reading →

It’s Not Trump

It’s not Trump, it’s the algos. While the mainstream media focuses on rumors regarding Trump’s return to office, the algos are zeroed in on VIX’s latest failure push above its 200-DMA.This is a kitchen sink moment. Oil and gas are pitching in, with 4.5% and 5.5% pops respectively in the pre-market. And, even USDJPY is … continue reading →

The Dollar’s Demise

If our charts are to be believed, we are on the cusp of a significant move in currency pairs and the bond yields. 10Y yields plunged back in March, then began rebounding via a long, drawn-out flag pattern that broke down in late June. Since then, it has been tracing out an equally long, drawn-out … continue reading →

Because They Can

A new week, a new breakout in the after-hours for no particular reason. And, just when the ramp job started to waver, a 5.6% smackdown on VIX – no news, just a reminder not to focus on the pandemic, the millions out of work, our dysfunctional Congress, the coming election battle, Trump’s tax troubles, etc. … continue reading →

Core PPI Tops Estimates

Maybe the Fed had it right, leaving the door open to higher inflation. Though August headline PPI came in slightly higher than expected at 0.3% vs 0.2%, core PPI rose 0.4% versus 0.2% expected. S&P futures sold off 8 points on the news, but the algos had other ideas. As is often the case, “someone” … continue reading →

DXY Breaks Trend

VIX’s 10/20 cross held yesterday, meaning we almost got a lower low on the day. The overnight ramp job was good for 32 points before DXY started attracting attention. It has dropped below the falling trend line it was patiently following, meaning our forecasts in the currency space are accelerating – especially EURUSD and silver. … continue reading →