The collision of global markets and social mood

Tuesday, March 3, 2015

Tuesday -- Housing, Vampires, JGBs, Limburger & The Automatic Add

ES Futures:
Off yesterday's closing highs, but not looking like an impulsive decline as yet. ES 2100.05 stop.

It seems the market does not like rising home prices this morning, because it keeps pressure on the Fed to raise rates. Housing price increases and rising wages, while great for Main Street, are like daylight to Fed vampires.

What the market still doesn't seem to care about is the action in Japan's JGB market where liquidity sounds even worse than our Treasury market.

The market will soon care about a lot it things that it doesn't currently.

Quiet again as USD hangs at highs.

Due to some particulars regarding June rollover which the CME Group has done a very poor job of explaining (meaning I don't buy their bullshit), charts of 30-year bonds and 2-year notes are completely whacked.

For the time being -- which could last until the next rollover -- I'm only charting 5s and 10s...neither of which look that well of late.

I think US and Japan treasury markets are currently the two most important things to monitor.

Crude and NG still trade like limburger.

Same with gold.

S&P Outlook:
Given the setup in the ES this morning (for now buyers are stepping in), 2109.19 should hold in the cash S&P. If not, 2103.75 is the far more important stop.

Should both levels fail, the market is probably far weaker than it appears and could sell off hard -- raising the possibility that it is not in the third wave of an ending diagonal but possibly a larger "b" wave with a possible target of 1925 -- which could paradoxically mean even higher highs to come.

What I'm gaming is a new marginal rally high then a sell off, but one that remains above 2041.88.

VIX in the 12s is an automatic add.

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