pebblewriter

Tag: VIX

  • Update on Currencies: Jul 6, 2022

    EURUSD and DXY have officially tagged the targets we set for them several months ago.  Recall that in the Mar 7 Update on Currencies, we noted that the Ukraine invasion could accelerate DXY’s next leg up.

    The yellow .707 at 106.276 and white 1.272 at 106.741 both intersect the white channel top in late 2022 – but it seems unlikely that DXY would wait that long to make its move given the fluidity of the Ukraine invasion.

    We noted in April that DXY had broken out of its rising red channel and, based on our analog, was likely to reach the target in July – which is exactly what it did.

    The move was made possible, of course, by EURUSD crashing as we expected. From that same post:

    There are many potential targets between here and the H&S target of .785. The first is the 1.06 lows from 2020, followed by the 1.03 lows from 2016. Once those break down, of course, the euro will face the 1.000 support, also the yellow .618, possibly as early as mid-March.

    The ECB fought the breakdown as long as it could. With inflation and fragmentation both surging, the current plunge has caught many off guard.Then there’s the hapless BoJ, sitting quietly in the corner hoping that no one notices just how fundamentally broken it is. We’ll update all the big picture charts today, focusing on their connection to the plunge in equities over the next two weeks.

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  • That Sinking Feeling

    As anyone on a budget could tell you, the headline of this post is hardly news. Income isn’t keeping up with expenses, and isn’t likely to any time soon.

    The Fed might prefer PCE over CPI because it ignores food and gas prices. But, it’s those very categories which are making it difficult for the average family to make ends meet.

    Futures were already off by 1.25% before the data hit the wires. Our analog, still on track, suggests the decline is going to accelerate in the coming weeks.

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  • Q1 GDP Slumps Further

    Stocks are essentially flat following a slight downward revision in Q1 GDP from -1.5% to -1.6% and export numbers which are truly circling the drain.

    The disappointing data came on the heels of the worst consumer confidence reading since Feb 2021 and three (so far) Fed presidents advocating a 75 bps rate hike in July.

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  • Charts I’m Watching: Jun 28, 2022

    Futures are up modestly, backtesting the 20-day moving average for a second day. Time to buckle up.

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  • But It Looks Like a Rally…

    Following a series of intraday ramps, futures shot up above the 10-day moving average as soon as the market closed. Bogus? Of course. But, the record will reflect (and the algos have responded to) a seemingly bullish move. Chase it at your own peril.

    Today’s tricks will include trying to get past the 10am New Home Sales and Michigan Consumer Sentiment data.

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  • Charts I’m Watching: Jun 23, 2022

    Futures just backtested the 10-day moving average and our analog trendline, leaving the door open for a pullback – as long as VIX doesn’t get clobbered again.

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  • Oil: Back in the Groove

    WTI spent May 2020 through Feb 2022 in a fairly well-defined channel (below, in white) as it recovered from its pandemic lows. It broke out on Mar 1, however, topping 100 and taking only 5 sessions to reach our 130 target which wasn’t schedule to happen until December.Since then, it’s seen a series of fits and starts, holding an internal trend line and flirting with reentering the white channel. It’s flirting no more. Against the backdrop of a gas tax holiday and significant demand destruction, it has dropped through the channel top and the 100-day moving average.

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  • Update on Bitcoin: Jun 21, 2022

    My apologies for today’s post being so late. Our webhosting company just now fixed the “network connectivity problem in one of [their] clusters.”  I’d be very upset about it except for the fact that this is the very first time in over two years that they’ve ever let me down. This post will be a retrospective instead of a look ahead at today’s session.

    Bitcoin reached our next downside target over the weekend: the dual Fibonacci targets of 17,611/17,692. Like everything else over the holiday weekend, it bounced pretty strongly. And, just like everything else, it won’t last. As we detailed in our last BTC update [see: Bitcoin’s Meltdown] there is substantially more downside ahead.

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  • Charts I’m Watching: Jun 17, 2022

    Futures bounced over 1% overnight into OPEX, but are now flirting with negative readings.

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  • No Pressure

    Futures are off about 2% following yesterday’s FOMC announcement and press conference – the closest we’ll probably ever get to a mea culpa – which was accompanied by the usual algo nonsense. Suffice it to say, traders have come to their senses and markets are once again reflecting the likelihood of the Fed tightening into a recession.

    Our algo remains on track, with much lower prices to come after whatever this bounce amounts to. Note that tomorrow is OPEX and Goldman estimates that options representing a huge $3.4 trillion in notional will expire ahead of a 3-day weekend. No pressure…

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