The collision of global markets and social mood

Thursday, February 11, 2016

Thursday -- Dark Sentiment, Yellen, Yen, Crude, Gold, Fibs

S&P E-mini Futures:
Down sharply, yet above their worst.

Marketwatch -- "It's grim"

JP Morgan -- "It's hard to imagine an uglier morning"

It's hard to imagine sentiment any darker.

Chair Yellen's testimony yesterday didn't help. Actually, it felt like the catalyst.

Oh, and WTI crude settled at a new low.

Recall yesterday was about an ECB/Deutsche Bank rumor. Rumors tend to reverse.

Asia had a bad night. And Europe woke up with a hangover.

What happened?

After all the dust settled after the close of yesterday's equity trading, it seems that with oil settling at new lows, and with Yellen sounding less and less like the sharpest tool in the shed, the first order of business was Risk Off. And that meant taking the world's largest and liquid market to the woodshed.

JPY soared.  Why. Because people de-risked . . . in size . . . and covered their JPY shorts. (Now it's bouncing hard.)

One would think USD would have been crushed. It wasn't. Warning to central bankers.

CHF is basically flat. AUD & CAD are weaker, yet not materially so.

Treasuries are trading as maniacally as gold. Straight up in the air.

WTI looks like it needs at least a couple more subdivisions lower. NG firm however, and is slightly higher.

Gold has gone full psycho, up over 3%. Silver higher. Copper not having it.

S&P Outlook:
Sure futures look grim. But the S&P tipped its hand two days ago when ticks shot up over 1300 as it was coming off its marginal lows -- that reeked of short covering.

Sure futures look grim. But the S&P has to break 1812.29 or else we could still be mired in "B-wave" bizarreness.

Even better, if 1828.46 holds, there could be an epic reversal.

What if it really does get grim? Got a Fib for that -- a Fibonacci extension target at 1776.49, just below the 200 week moving average.

Maybe we'd get a few more "grim" headlines then.

Or even another "Reset."

Or maybe finally a "Reboot."

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