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 →

Just Two Charts

Two charts best define the day we had yesterday. First, VIX tagged our next highest target: the intersection of the .786 Fibonacci retracement and the trend line connecting two previous highs. The other one was the SPX arithmetic (as opposed to log) chart, which stopped on a dime at the channel bottom.The bleeding continued well … continue reading →

The Storm Finally Arrives

After weeks of gathering clouds, the storm we’ve been watching has finally arrived. S&P futures are lock limit down just a few points above our next downside target. Not surprisingly, all of our other targets across currencies, commodities and fixed income have either tagged or exceeded our next downside targets, with more to go once … continue reading →

Decision Time, Again

We start this morning’s post with a peek at the Russell 2000 as it perfectly illustrates the dilemma facing the broader markets this morning. Up until September 2017, RUT followed a well-defined rising channel shown below in yellow.  Like all channels, it was defined by the tops and bottoms along the way. The only problem: … continue reading →

Inflation Games

Inflation drives interest rates. Though the Fed probably wishes it didn’t, it’s an inconvenient truth.  There are much tighter correlations, but consider the strong positive correlation between CPI and 10Y notes. This matters, of course, because with $22 trillion in debt, the US faces the same problem as the ECB and Japan: High interest rates … continue reading →

Because Appearances Matter

It’s not too surprising that there’s been a firm floor under oil and gas prices, given the upcoming Aramco IPO.  But, isn’t it funny how CL has popped above its SMA200 every single day this week, even in the wake of dismal inventory data? Just like it’s funny that ES, which pretty obviously should have … continue reading →

Algos: “We’ll Take it From Here”

More fun and games from the market-rigging department… If SPX’s rally has impressed you, check out the Nikkei.  Since its Aug 26 lows, NKD is up a whopping 13.8% — more than twice SPX’s impressive 6.0%.Do what I did and google “Japan” and “economy” for the past month and you’ll see nothing but negative stories … continue reading →

A Broken Record

Though it is getting a little monotonous, I’ll never get tired of saying that we’re about to tag our next downside target. The past two weeks of downside have been a great recruiting tool for chart patterns and this website in particular. A note to prospective members…we’re currently offering auto-renew monthly subscriptions at half-off the … continue reading →

Time for Bulls to Get Nervous?

SPX needed about 22 points downside to reach the support of its SMA50, a rising channel bottom, and a falling channel bottom.  ES, which finally reached our 2655 target from last week [see FOMC: Endgame] is currently off 30 points. At this rate, SPX will breach its support on the open, especially if USDJPY doesn’t … continue reading →