Fourth Time a Charm?

This is the fourth time in a row that ES has pushed back into the rising channel from which it previously broke down. This one is more important, however, as it has the 50-day moving average in its sights. As we discussed last week, all the stars are aligned should the algos wish to pursue … continue reading →

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 →

Oil and Inflation

WTI has reached our 200-day moving average target posted last month.This is a very significant move which, unfortunately, didn’t happen soon enough to affect June CPI or PPI. Long-time readers know that I’ve been harping on inflation for a long time. The reason is simple: math. Annual “headline” CPI, which is the one we all … continue reading →

COVID-19: What to Expect

Updates are in reverse order, meaning the latest update is just below. UPDATE:  January 18, 2021 It has been almost a year since our first post on the coronavirus [see: More Where That Came From.]  We tried to stay away from politics. But, it was often very difficult – such as when this Feb 25 … 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 →

Update on Oil: Apr 6, 2020

Many seasoned investors are surprised to see how positively correlated stock returns have been to oil prices. Energy stocks make up 8% of the overall market, so you’d expect them to have some influence. But, thanks to the increasing prominence of algorithms and quantitative trading, the impact has grown well beyond what 8% should contribute … continue reading →

Update on DJIA: Mar 18, 2020

In our last dedicated update on the Dow [see: July 2019 Update], we noted the intersection of a number of overhead resistance features in its chart and offered some thoughts on its downside potential if it managed to reverse. Note that our 18974 target represents a backtest of the red channel from which DJIA broke … continue reading →

Who’s Propping up the Stock Market?

It was October 1989 and the stock market was in trouble. Two years after crashing 36% (including 20% in a single session) the S&P 500 had made a comeback and had climbed back to new all-time highs. But high inflation, slipping junk bond prices and failing S&Ls were in the headlines daily. On October 13, … continue reading →

Middle East Tensions Escalate

Not too surprisingly, the Iran problem didn’t go away over the weekend.  If anything, both sides are making threats that would significantly expand the conflict. What’s more, Trump’s unilateral actions have resulted in Iraq’s parliament calling for all US troops to withdraw from Iraq – without question an important win for Iran. Trump’s 2011 predictions … continue reading →