The collision of global markets and social mood

Wednesday, May 11, 2016

Wednesday -- Bear ETF Inflows, Price Scenarios

S&P E-mini Futures:
Slightly down, but well off its worst levels.

Seeing this as probably the most important bit of news today. From Bloomberg:

"Assets close to surpassing long ETFs for first time since 2013"

"Another sign of skepticism as stocks recover from February low"

"The most aggressive traders are joining the growing ranks of those betting against the three-month rally in U.S. stocks."

"So big have been the inflows that the market capitalization of inverse products is on the verge of eclipsing bullish notes for the first time since 2013."

2013 saw a bull run to new highs.

If ever there was fuel for a false breakout to new all-time highs, this may be one of the signs. If internals remained weak, a rollover could follow.

Mixed in Asia last night, moderately down across Europe thus far.

USD weakness, slight commodity strength, but JPY and CHF stronger. A mixed bag tilting toward Risk Off.

Consolidation. Still poised for higher prices.

WTI crude higher, but looking like a rest period is close. NG higher too.

Ripping higher, yet could be needing a rest near term. Silver, platinum, and palladium each up over 2%.

S&P Outlook:
Yesterday closed the 2081.43 gap and even closed above the nearby higher swing point, doing so on strong ticks and A/Ds yet weak volume.

The 78.6% Fib retracement is at 2095.73 just below 2100 round number resistance.

The larger question is whether price is concluding a 5-wave pattern up which could either signify a top of some sort, or merely wave 1 of a final & larger wave 5 up to the 2300-2500 area.

Or, is price getting ready for the previously mentioned false break out. Internals have been weak, yes, but inverse ETF inflows (essentially large short bets) could provide the fuel.

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