The collision of global markets and social mood

Wednesday, September 9, 2015

Wednesday -- Manic Moves & B-Wave Material

S&P E-mini Futures:
Well bid, strong follow through to yesterday's big up day. The structure is quickly looking more like an impulsive rather than the three-wave corrective structure noted yesterday.

What a difference a day makes when you're Japan. The Nikkei broke its August lows Monday night then exploded higher 7.7% last night, which Zero Hedge noted was "the most in nearly seven years in percentage terms, and the biggest point move in over 21 years.

"The Nikkei Stock Average surged 7.7%, or 1343.43 points, to 18,770.51, marking the benchmark's biggest daily percentage gain since October 2008. In point terms, it was the biggest gain since January 1994."

Has anything changed? No. The Nikkei's chart looks much the same as the S&P.

Overall, best headline out there today is from Reuters. Sounds like a pack of wolves.

AUD continues higher, buoyed by a strong move in copper prices, a possible signal that China demand is picking up. CAD continues weaker, as does JPY.

CHF is stronger today though amid all the manic moves, which could be notable.

So what's not to like with equities booming around the globe? Rising yields, everywhere. And very doubtful it's part of the "rising rates for the right reasons" narrative.

2s-30s are following through on yesterday's weakness and yields are higher. German bunds and Japanese JGBs slightly too. The biggest moves are in our 10s and 30s.

WTI crude consolidating before API inventories. NG consolidating too.

As noted above, copper had a huge day yesterday on massive volume. Too soon however to see if it's anything other than short covering based on volatile moves (and actions) out of China.

Gold and silver nowhere.

What is it about women who sell aluminum? They're knock outs. I once met a girl flying home from London who was in aluminum sales. Was absolutely smitten with her for years. Yesterday I met a beguiling girl while looking for apartments. Complete knock out. Impeccably well dressed. What did she do? "Industrial aluminum sales." Loved the cheerful way she gave me her number and said, "You can call me and ask questions about anything you want." Ha

S&P Outlook:
All of the above supports the thesis that the S&P may shoot for 2000 round number resistance or even higher to 2050.

UVXY/TVIX getting crushed due to continued mismatch with VIX. Like any other derivative, the underlying is the "market" and all that matters. And to me the VIX is not a buy yet (though I want it to be).

Everyone seemed to have loaded up on volatility too late. I think they need to get blown out (or at least feel some pain) before another move lower materializes.

All this supports the B-wave idea (or a possible triangle too). B-waves are notoriously tricky and misleading. With global markets making manic moves, so far so good.

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