The collision of global markets and social mood

Tuesday, October 18, 2016

Tuesday -- Sea Of Green, Higher Prices & Lower Velocity

S&P E-mini Futures:
Bounce mode.

Sea Of Green around the world today. Several hot inflation readings seem to have bolstered confidence that central planning really can stimulate growth.

It's really just higher prices that eat into available spending. Thus a mirage.

In our global credit and debt economy, this chart remains a lot closer to reality (and a continued headache for central banks):

Risk-On tone thus far.

Still trying to rally, yet not on volume.

Meanwhile in Japan, an enhanced liquidity auction for 20-yr, 30-yr and 40-yr JGBs failed to spur demand despite an improvement in the bid-to-cover.

If no demand, rates will rise. If rates rise, they're done.

WTI crude and NG continue to consolidate at highs.

With all the so-called inflation afoot, one would think metals would be rallying like crazy. Prices are higher, but gold is lagging thus far.

S&P Outlook:
The current price action in futures has the look of a rally that will eventually be fully retraced. But for now prices are loving higher prices. Obtuse logic, yet not so in a world desperate for any kind of money velocity.

What a trip it would be to see the 2163.66 gap get filled up there in deep-retracement Fib-land.

Still want to be long, and I am via SPY 214 calls, but currently thinking that there will be opportunities for even better deals soon.

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