Yesterday’s rally was so lackadaisical that it was hard to see it as having much staying power. Today we’ll find out, as USDJPY has already broken down and CL has reached another potential turning point.
In fact, the only thing reliably driving the futures higher at the moment is our old friend VIX.
A Bloomberg article published yesterday talked about how unreliable VIX has become as a measure of risk. True, but I look at it differently. I see VIX as a very good indicator of where central planners are trying to push the market.
Formerly an indicator, it has become yet one more tool with which they can goose stocks — often in contradiction to the news flow. One of our astute readers pointed out yesterday that a red candle in VIX matched up with a red candle in SPX. Unfortunately, this has become a common occurrence.
But, rather than bemoan the market’s brokenness (busted…I still do a lot of that), I see it as a tool with which to discern TPTB’s intentions. Deny it if you like, but there is very obviously a script that central bankers and their lackeys tinker with on a daily basis. Their one imperative: a happy ending.
If we can sneak a peek ahead at the next few pages, we’ll continue to do well even as fundamentals and formerly reliable indicators fail us.
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