The collision of global markets and social mood

Tuesday, September 15, 2015

Tuesday -- Markets Back To Markets?

S&P E-mini Futures:
Flat.

News:
Lots of news coming today starting at 8:30am NY time with Retail sales, then Industrial production, and Business inventories.

So far, retail sales were expected 0.3% and came in at 0.2%.

China down another 3.5%. No further announcement of stimulus from BOJ.

FX:
JPY rallied on the lack of further BOJ stimulus. always something to watch in a general Risk Off environment.

Treasuries:
Trying to rally but doing so on zero volume. Not a good setup.

Energy:
WTI crude looks coiled, and without a sharp break lower, could be getting ready for another probe much higher (~62 area). NG still range bound.

Metals:
Gold and silver look listless. Copper pulling back on light volume.

S&P Outlook:
With commodities looking quite oversold and attempting a bounce at least, I want to be cognizant that a change in the markets may be taking place on the heels of the recent correction in equities.

Victor Niederhoffer often referred to this as a change in "form," borrowing a term from sports betting.

If true, a whole new set of correlations could materialize that could throw a wrench into the Business As Usual, Risk On playbook since QE.

Basically, the markets may be sniffing out that QE only works if continually applied. And the will to continually apply it is probably close to being over.

Or . . . if not, its effectiveness may be failing, in which case, faith in central banks could be failing, which could be worse.

If markets go back to being markets, expect a radical shift. Trends could cease while markets seek "real price" via price discovery, reversion to the mean, and eventually, equilibrium.

It would feel mean, but it would be real. And most welcome.

Also, using yesterday's chart (not updated) keep in mind it is also possible that an A-wave is still incomplete and needs one more flush below 1867.01.


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