The collision of global markets and social mood

Tuesday, February 21, 2017

Tuesday -- Bloomberg's New Startup Barometer Vs Ring Of Fire & VIX

S&P E-mini Futures:
Another overnight high. Another choppy pullback from it.

Love it. Bloomberg created a "U.S. Startups Barometer."

The very fact that they felt compelled to create it is a social mood indicator itself, in an ironic way, and could also suggest the easy-money, venture-driven startup trend may be close to ending.

However, like most financial news, Bloomberg's barometer doesn't peak until after market tops. So while it's corrected quite a bit from its 2015 highs, one might expect its due for a good rally.

All that social mood ebullience has to be reflected somewhere.

In their own words: "Few business communities swing from boom to bust as reliably as Silicon Valley."

Boom, bust, greed, fear . . . social mood at its best.

Check it out. It's pretty cool.

Maybe there should be a Ring Of Fire Barometer too. Something's up.

Source: USGS

Something's up here too but it's not the VIX.

This is the latest installment of contradiction, from "curiously low" to its "biggest two-day jump since Trump's election." Yey Dow 30,000.

It's most likely still registering rampant complacency, and no, it's probably not over.

Nor are the latest political jitters from the shift from globalism to populism, which widened French-German spreads to an extreme not seen since 2012 Monday before calming down, as Marine Le Pen continued to show strength in the French polls.

And the latest Fed speak was credited with putting a bid under the dollar, but it hasn't yet broken its 101.75 swing point resistance.

USD strength having a remarkable effect across all the major currency pairs . . . except for Bitcoin, which is up over 2%, possibly on concern over China's rising credit imbalances.

Prices so far snapping a strong two-day run.

WTI crude looking like it wants to break out of its high level consolidation and test its recent 55.24 high.

NG looking the opposite way -- down well over 4%. 2.546 swing point in the crosshairs.

Copper looks set on resuming its rally while the precious metals linger in the red thus far.

S&P Outlook:
Regarding the VIX, these are 6-standard deviation Keltner channels plotted against it:

Notice they just barely contained the sharp drop in 2015. Complacency could continue until the Keltners meet the horizontal lines drawn on the chart. Then the VIX might be ready for another epic squeeze higher.

Friday's options expiration was probably a big relief for those off-balance premium sellers that made the news, but otherwise it was a pretty uneventful day.

Prices rose on inverted A/Ds.

This rally feels long in the tooth and any new high today will probably have me in SPY 235 puts should internals continue to show weakness.

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