The Big Picture: Jan 25, 2017

Yesterday, I laid out the primary drivers of the rally that’s gripped stocks since election night: USDJPY, VIX and CL.  As luck would have it, we were immediately rewarded with an affirmation of those dynamics:  SPX rallied another 15 points on a 1% USDJPY gain, a 1.7% CL gain, and VIX being smashed by 4.25% — all intraday, of course.

The “magic” continued overnight, with VIX breaking down another 2.5% to lows not seen since July 2014.  It’s enough to send futures up another 11 points.  2017-01-25 VIX v ES 60 0625

Is it sustainable?  Today, we’ll focus on the big picture and the continuing effectiveness of our analog.

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