The collision of global markets and social mood

Tuesday, October 11, 2016

Tuesday -- Potential Macro Set Up

S&P E-mini Futures:
Down modestly.

Yesterday the Dow Jones Industrial Average closed below its 2015 high once again.

Putting this together with the current macro set up as well as the current level of geopolitical belligerence leads me to believe that the markets may be warning us of some rough sledding soon.

Crude is putting pressure on its June high -- a breakout could target 60-65 quickly.

USD continues to defy its doomsday critics and climb higher -- staying above 96.33 keeps the pressure on.

US treasuries look increasingly ready ready to turn and rally in price. A significant geopolitical event could drive a panic into safety.

And the longer a major index such as the Dow telegraphs "failed breakout" to the world, along with a very low VIX, currently in the 13s, the foregoing is a recipe for an October Surprise.

Just something I'm watching carefully.

USD strength.

Volume dried up completely yesterday. Primed for a turn up in prices for the moment.

WTI crude still gunning for its June 51.67 highs. Fresh overnight tally high in NG.

Currently down fractionally across the major metals but with palladium leading the plunge.

S&P Outlook:
Yesterday's action was yet another failed breakout -- the e-mini overlapped in last night's Globex session. The equivalent on the S&P cash is 2157.40.

Still would rather see a rally into 2177 or 2181.30 on weak internals then a reversal. We shall see.

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