The collision of global markets and social mood

Monday, February 13, 2017

Monday -- Yellen, Le Pen, Treasuries, SPY Puts

S&P E-mini Futures:
Record pre-market highs.

Quiet news flow thus far before Yellen's semi-annual monetary policy testimony on Tuesday and Wednesday, but Trump euphoria continues over a "phenomenal" tax plan to be announced soon.

The only truly phenomenal plan for taxes is zero. So anything short of No More Taxes could set up a bit of buy-the-rumor, sell-the-news.

Meanwhile equity markets are g r e e n around the world.

Quiet thus far. GBP, JPY, and NZD moving the most -- up, down & down, respectively.

Not looking happy again.

December monthly TIC (Treasury International Capital) data is due this week. It will be of note whether China and Japan have continued to be net sellers of US treasuries. Seems they've got their own internal problems to deal with lately, along with rising difficulty hedging against the rising dollar.

Neither adds up to growing demand for US treasuries, which could provoke higher rates beyond the Fed's control.

In France, increased odds that far-right candidate Marine Le Pen could become the French president rocked the government bond market and caused an agency bond deal to be pulled.

WTI crude still hanging at highs as volume dries up. NG fresh gap lower after a short-lived bounce.

Red ex-copper once more. Copper and most other base metals ripping today.

S&P Outlook:
Friday recovered and led to record highs. Overnight markets have been strong. The wildcard remains Yellen's testimony Tues/Wed.

Volume continues to deteriorate while the daily NYSE A/D line remains solid.

The S&P did manage to close just below two significant Fib extension levels (2317.572318.59) and at the top of a daily wedge with a slight candlestick topping tail.

A new high in the S&P cash could continue into the 2320-2330s.

But a new high and a reversal back below Friday's peak (2319.23) by around 10am on weaker internals will have me in SPY puts with a tight stop.

No comments:

Post a Comment