What Market?

The holding pattern continues. Futures levitated overnight to the gently falling 10-day moving average yet again. And, yet again, VIX provided the precise guidance the algos required.The longer this goes on, the more we begin to resemble the Nikkei, with preset moves prescribed by a central bank: support and resistance predetermined by committee. It makes charting easier, but it strains credulity to even call it a market.

Nowhere is this as obvious as in WTI, which has traded in an ever narrowing range since its miraculous recovery in April and May. Note the tilting trend lines of support.  We place downside targets on the chart to represent not our actual expectations, but to indicate where prices might drop if the bankers were to lose control.RBOB futures have done the exact same thing, also ignoring such trivial issues as supply and demand or geopolitical developments. Fortunately, the FOMC concludes their meeting today and the motivation for the current holding pattern will pass.  Until next time…

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