pebblewriter

Tag: stocks

  • More of the Same

    If you liked yesterday, today is shaping up as more of the same. But, there are still a few warning signs tugging at the market’s sleeve.

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  • Monday Morning Meltup

    Futures are continuing their meltup in the pre-market on a 4% bounce in crude oil and the usual overnight slump in VIX.

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  • Charts I’m Watching: Aug 20, 2021

    COVID deaths continue to mount and the return to work pushes further into the future, a negative backdrop for equities at a time when they’re losing momentum from the reflation factors.

    Futures are off mildly after bouncing off their overnight lows.

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  • Momentum: It Goes Both Ways

    The correction is gathering steam, with ES off 40 points earlier this morning before getting a bounce. From a technical standpoint the culprit is VIX, which broke out of the falling channel which has guided stocks higher since March 2020. Our downside targets remain unchanged.

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  • Retail Sales Falter Without Stimulus

    July retail sales fell 1.1% versus -0.3% consensus, reflecting the impact of stimulus payments, Amazon’s Prime Day change, and the general apprehension surrounding the delta variant.

    Yesterday’s bad news faded under heavy algo action, with VIX going into meltdown mode……the instant SPX reached its SMA10. The bears will get another shot today.

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  • Inflation: Still Here

    Annual CPI remained at 5.4%, the highest in 30 years. And, that alarming number masks plenty of data which the BLS methodology simply ignores. Shelter, for instance, registered a 2.8% YoY increase per BLS’ survey-based calculation. Yet observed apartment rents increased at 9.2% in just the first six months of 2021. And, housing prices have been rising at the fastest rate in over 30 years.

    Aside from the games played by the government, some non-transitory trends remain concerning: energy, vehicles and commodities all remain quite elevated. Combined with swiftly rising wages, it will be difficult to put this genie back in the bottle.

    The algos are more concerned, however, with another overnight smackdown in VIX which sent S&P futures to new highs – for now. Pay attention to where that leaves some important Fib retracement levels.

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  • Update on Gold and Silver: Aug 9, 2021

    The Fed detests gold and silver because, like higher interest rates, they are a stark reminder of the soaring inflation the Fed hopes we’ll ignore.  Interest rates can be manipulated lower by buying up every bond in sight. The Fed has been doing this to the tune of $120 billion per month.

    Gold and silver, on the other hand, can simply be shorted, which is exactly what has happened – once again breaking a significant long-term uptrend and dashing gold bugs’ hopes for a breakout.

    Silver, having reached our next downside target, faces a particularly important test.

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  • Charts I’m Watching: Jul 6, 2021

    Stocks rarely drop over a 3-day weekend. This one was no exception. The miniscule decline we saw in the futures last night has been all but erased despite a conciliatory 5% bump in VIX to backtest its SMA10. No fuss, no muss.

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  • Update on Currencies: Jul 2, 2021

    As we noted yesterday, EURUSD is finally fulfilling our expectation of a breakdown from the trend established at the Mar 2020 lows.  This move has been a long time coming and has potentially significant consequences for the DXY.

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  • Bullard: Wait, Did I Say That?

    Not that futures needed any help melting down this morning, but Jim Bullard just poured gas on the fire. Yes, Jim Bullard! The Fed president who never had a hawkish thought in his life.

    Then, he trashed the Fed’s most nonsensical policy: throwing $40 billion per month into the mortgage market when mortgage rates are already at all-time lows.

    Bulls better hope that ES can bounce at our next downside target: the 50-day moving average currently at 4174.

    It appears that algos are finally being given the green light to (drumroll please) decline.

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