The collision of global markets and social mood

Monday, January 11, 2016

Monday -- Bounce Mode

S&P E-mini Futures:
Bounce mode.

Deeply saddened by the passing of David Bowie. He wasn't just a performer to me. He was pretty much everything.

Please excuse my brevity today.

Asia had another rough night, yet Europe is up and we are too. Suddenly it's not all about China. Nor should it have been.

The reasons for market swings will always take care of themselves. Basically from a pattern perspective, the market is simply bouncing where it should at the moment.

Ditto the yen. Bouncing where it should to confirm the triangle thesis, which could be "equity-bullish" globally.

These are down so far today, which could be seen as a warning sign. OR a sign that money is leaving the perceived safety of treasuries for Risk On in equities.

What is notable is the volume in the Globex S&P E-mini contract vs the 10-yr. Big action in the E-mini.

WTI crude giving back gains, yet holding above recent lows. NG giving back gains in sympathy.

Hearing a lot of pent up bullishness in gold with every uptick which could be cautionary. Silver up slightly, yet copper hit new lows.

S&P Outlook:
This chart of VIX term structure is from Thursday's close, but the point is still clear: VIX pricing is showing a potential buy signal for equities with a rather large divergence.

I also note that junk and high-yield corporates have not made lower lows along with the S&P which is another example of divergence.

Nor have NYSE declining issues.

I am still leaning toward an ABC pattern or a large triangle leading to new all-time highs. Then a wipe out. Continuing to view current action as a market REBOOT and am still on the lookout for that exact word to be used by a media organization. It's getting closer.



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