The collision of global markets and social mood

Thursday, March 17, 2016

Thursday -- Large Adverse Shock, The Hamptons, Charts

S&P E-mini Futures:
Bouncing from sharp decline from new overnight highs.

J Yell dropped some weirdness at the end of her prepared remarks yesterday that sounded an awful lot like either accidental subtext (unintended communication) or a straight-up warning. Leaning toward the latter, but judge for yourself. Last paragraph here with emphasis added:

Finally, the Committee will continue its policy of reinvesting proceeds from maturing
Treasury securities and principal payments from agency debt and mortgage-backed securities.
As highlighted in our policy statement, we anticipate continuing this policy until normalization
of the level of the federal funds rate is well under way. Maintaining our sizable holdings of
longer-term securities should help maintain accommodative financial conditions and should
reduce the risk that we might have to lower the federal funds rate to zero in the event of a future large adverse shock.

Thank you, and I’ll be happy to take your questions.

That quick transition at the end sounded to me a lot like Have A Nice Day!

A future large adverse shock is why I dumped XIV (short VIX) knowing I was probably leaving some on the table.

Elsewhere, high-end real estate is sending a warning as well.

Hamptons luxury home sales soften as Wall Street weakness takes a toll

Weakness in the high-end while the low-end keeps rising is usually a sign of a topping realty market. If this becomes a trend in other major markets, get ready to add a ton of long volatility.

Happy St. Patrick's Day. Just learned that Guinness is not sold anywhere on the island because Heineken managed some sort of exclusive distribution rights, which sounds a lot like a payoff to me.

So I guess I won't be drinking Guinness or Heineken.

Seeing a lot of big moves coupled with candlestick reversal tails. Notable strength in JPY and CHF along with a rough day in Europe thus far may signal Risk Off building.

Prices ripped higher post-FOMC yet did so on light volume vs. the recent decline. Something to watch.

WTI crude may have just formed a 5-wave impulse from 26.05 lows. More stuff to watch.

NG looks good too but may have more work to do lower.

Gold's $40 rally looks great until you view the subdivisions of the waves. It needs a lot higher than 1287 to look right. Silver ripping too, but still needs above 15.95.

Platinum, palladium, and copper all up 2% or more.

S&P Outlook:
Updating this chart from a few days ago.


Important because it could be part of this scenario.

Market closed 38 ticks below the upper Fib zone limit of 2027.60, a sign that it respects it -- which means we should too.

As market limps higher, up volume vs down volume is abysmal.

If no deep retracement (such as below 1977 area), however, price may be forming something like this. Great chart by elliott-wave-analysis at

Source:  elliott-wave-analysis 

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