The collision of global markets and social mood

Wednesday, September 16, 2015

Wednesday -- Fed Day #1

S&P E-mini Futures:
Flat to down.

S&P cut Japan to "A+/A-1" from "AA-/A-1+" and mentioned the reason -- Abenomics -- by name.

"Over 2011-2014, average per-capita income in Japan slipped to US$36,000 from close to US$47,000. Apart from a sharp depreciation in the exchange rate between the yen and the U.S. dollar, this also reflected weak average economic growth during the period and persistently weak price trends. Despite showing initial promise, we believe that the government's economic revival strategy--dubbed "Abenomics"--will not be able to reverse this deterioration in the next two to three years."

Meanwhile, August US CPI dropped 0.01%. So by all means, raise those rates.

No word why GBP is the relative leader today, although I would not be surprised if BOE's Carney is working on mirroring the Fed -- or perhaps the action in treasuries -- in order to promote the appearance of globally-coordinated central bank policy.

Yesterday's action was indeed messy. So perhaps the treasury market is frontrunning a Fed hike by doing their job for them, which would explain the emerging Dovish Hike narrative.

WTI crude acted super weird yesterday. I was long calls, flat, and then wished I was long again. Now I don't. The waves just look too messy. Not my cup of tea.

Gold and silver having ok days. Copper too.

S&P Outlook:
1920 still is a potential if volatility enters around the Fed decision tomorrow -- obviously new lows are a potential too.

I still like the 2000 and 2050 areas. Even as high as the 2100 area and the gap at 2096.92.

A fourth wave down scenario would gain weight for me if 2000 can't be reached or sustained.

A B-wave remains my preferred scenario which means higher than expected.

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