Watching this administration operate the markets, I sometimes get the feeling they’re trying to throw the game. Witness Mnuchin’s bizarre announcement that everything is fine, there are no liquidity issues, I’m going to convene the PPT just for the heck of it.
It’s akin to bursting into a crowded theater and screaming “don’t worry, there’s no fire!” Sure, some might reach for another handful of popcorn. Wouldn’t you at least look around and sniff the air more carefully? Maybe a few of us would even make our way toward the exits — just to be on the safe side.
Futures are currently off 14 points on what might otherwise have been a typical maintenance-mode Christmas Eve.But, that’s not the problem. After reaching our latest downside target on Friday, SPX closed below support. And, this morning, USDJPY and TNX have broken down. VIX, which already broke out last week, is threatening another breakout. This is no way to run a rescue operation.
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Thus, equities are likely to continue to our next lower targets. ES’ falling white channel has broken down and the smaller red one might well follow suit.
A bounce by either, or both, could do wonders for the broader market — especially if the PPT takes concrete action (e.g. whacks VIX.)
EURUSD continues sideways, with the SMA200 in easy striking distance.
Even oil and gas are getting in on the bearish action with breakdowns of the more orderly path they might have taken to our next downside targets.
I intend to post updates to bonds, gold and maybe a few others later today — probably after the 1pm close.
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