The collision of global markets and social mood

Wednesday, May 6, 2015

Wednesday -- Booming Cities & Shadows, Bonds & Noise

ES Futures:
Solid bounce overnight, but maybe not back from the woodshed yet.

Which point of the business cycle do you think would produce a story like this?

"NEW YORK— “Billionaires' Row” is rising over midtown, a collection of glassy new pinnacles that promise the kind of condo views you can only get in Manhattan by building taller than everything else around."

A plethora of skyscrapers crowding out sunlight could be the latest incarnation of cycle analyst Edward Dewey's Skyscraper Indicator in a world awash in QE. Take note.

Elsewhere, the news for me is in the world's bond markets where things are anything but rosy. All other news is noise for the time being.

Significant yet incomplete moves in AUD, EUR, JPY, and USD continue.

Deutsche Bank just noted that peripheral bond yields in Italian, Spanish, and Portuguese 10-year paper "are now +49bps, +49bps and +63bps higher than when QE started." These figures are a couple days old, but the point is well made. This is not "rising rates for the right reasons" as CNBC would likely say. This could be the start of trouble as US 10-year notes expanded in overnight volume once again, driving prices lower and yields higher. Again, take note, even if it's yet another false alarm.

I'm pretty mad about crude oil and here's why: I forgot to keep up to date with adjustments to the chart of the continuous contract such that when I was looking for 37.33 the actual targets had shifted to 45.48 & 45.64 -- crude got to 45.42.

Gold still having a rough week. 1193s.

S&P Outlook:
Perhaps the intermediate wave 3 has already been put in. Perhaps not. Hopefully this week will tell the tale.

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