The collision of global markets and social mood

Wednesday, April 1, 2015

Wac-O-Mole Wednesday -- Japan Rattles Markets

ES Futures:
Wacky, volatile overnight session on bad Japanese numbers and better European ones.

News:
The news to me is that the market finally got flipped out about Japan. The BOJ's Tankan business survey saw conditions deteriorate which caused panic in JPY and the NIKKEI, as well as our ES futures. Even crude oil went mental.

The core moves -- stronger JPY (short carry covering), weaker equities -- add weight to the thesis that JPY's widely expected decline is not 100% certain, and that the rest of the world is still vulnerable to Japanese contagion.

Maybe that is why Bank Of America Merrill Lynch is out with a warning about about JGB liquidity.

FX:
USD higher, but stopped just ticks short of a clean 5-wave rally from the 3/26 lows. JPY still showing stress.

Treasuries:
Add the 30yr to the list of rising wedges, albeit smaller in size. 2s-30s all higher, yields lower.

Energy:
Crude got to 47.05 in the after market hijinks. Still thinking it breaks 47.

NG's descent is on pause after rollover, but new lows look forthcoming (as do potential buy areas).

Metals:
Gold still on a sub-mission, below 1200.

S&P Outlook:
2067.15 broke late in the day, but the fireworks didn't occur until after the close.

Even though futures reclaimed all their losses, it remains to be seen what sort of damage has taken place on the cash index today.

Futures remain lower as of this writing, yet as bleak as things looked last night, they were unable to break the 2039.69 equivalent cash low.

Technically, the break of 2067.15 opens the door to a test or break of 2039.69, but doesn't require it.

Rather, price is stuck in the middle of a month-long range. For my positioning, it is best to wait for moderately lower or higher levels before acting.

Still feeling that 2039.69 to 1980.90 is open for price discovery.


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