The collision of global markets and social mood

Monday, February 27, 2017

Monday -- The $5,000 Hamburger, Debt Ceiling Time Bomb, Equinox & Fib Cluster

S&P E-mini Futures:
Listless after hitting new overnight highs.

Social Mood:
Here's more peak mood evidence.

Hearing of 30+ minute wait times for $6 coffee at Philz in Palo Alto, CA.

I can't wait for the Snap IPO.

Even though French-German spreads are calming down after polls showed French centrist candidate Emmanuel Macron would beat far-right Marine Le Pen, the action in German bunds has some concerned that there is a flight to safely going on.

The eurodollar market is a mess. Now there's evidence of Target2 (Trans-European Automated Real-time Gross Settlement System) imbalances between Italy and Germany. If Italy were to leave the Euro Zone, it would owe Germany €356.6 billion.

More here: Target2 Imbalances Hit Crisis Levels

Add to that this little time bomb.

From David Stockman, former Reagan Administration White House Budget Director:

“I think what people are missing is this date, March 15th 2017. That’s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015. That holiday expires. The debt ceiling will freeze in at $20 trillion. It will then be law. It will be a hard stop. The Treasury will have roughly $200 billion in cash. We are burning cash at a $75 billion a month rate. By summer, they will be out of cash. Then we will be in the mother of all debt ceiling crises. Everything will grind to a halt. I think we will have a government shutdown. There will not be Obama Care repeal and replace. There will be no tax cut. There will be no infrastructure stimulus. There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.”

Quiet thus far but for MXN strength and GBP weakness.

Rollover to the June contract. Price lower/yields higher across the curve.

WTI crude higher with NG pummeled once again, down over 3%.

Gold and silver down, copper sideways, platinum and palladium slightly green.

S&P Outlook:
Between March 9-23, a cluster of 7 Fibonacci cycle days mark a significant time target that also coincides with the Spring Equinox. Markets love to top or bottom around equinoxes.

Source: John Hampson,
To the above chart one could also add the Alibaba top 9/19 2014, as well as these turns: 3/23 2015, 9/17 2015, and 9/12 2016.

A/Ds losing momentum as the market pressures new highs. 52-wk high-lows are weak. Up-down volume diff is even weaker. The TLT-JNK spread is ringing alarm bells.

Times like these it feels best to let the market go as far as it can while realizing the ensuing correction will be that much more spectacular. Especially with those Fib time clusters approaching.

The 2373.89-2379.39 Fib zone remains in easy reach.

Would regard below 2339.58 as a fumble.

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