The collision of global markets and social mood

Wednesday, February 22, 2017

Wednesday -- Mood, Mode, Jay-Z VC, Eurodollar Market

S&P E-mini Futures:
Looks like another three-wave pullback from a new rally high.

Social Mood:
From now on this section is not news anymore, it's mood.

Mood is the driver of markets, not news.

Mood is the how and why behind how markets move.

Mood is mode.

News might well cause momentary action, but doesn't affect trends.

Mood IS the trend.

So . . .

Q: What mode might we be in when a wildly successful rapper launches a venture capital fund?

This mode:

Party mode.

Maybe it's time to cover all your bases and protect your portfolio.

You might want to check out this cool interview with options great Tony Saliba on my friend Sean McLaughlin's new podcast Gimme Some Options. It's great.

I hope these guys can get together for a beer in Chicago sometime. Sounds like they would make great partners in the trading business.

Moodwise, just like the markets started rallying before the election, perhaps the ominous spread widening between France and Germany is not simply about Marine Le Pen's political gains.

With spreads on the move yet again this morning (even as equities rallied on French & German PMI readings which showed further expansion), and given some of the undercurrents going on in the Eurodollar market, we should avoid the temptation to try to assign a news item to what might clearly be bank stress.

Dealers (banks) have left the Eurodollar market, which has left behind very low liquidity. That could be a big problem.

Fed minutes at 2pm.

Much the same as yesterday, but JPY stronger, so caution might be creeping in.

Prices reaching higher once again, but not yet seeing the degree of liftoff one would expect.

WTI crude backing away from 55.

NG got blown out yesterday, -10%. When it was noted that the 2.546 swing point was in the crosshairs, who knew it would be in one day?

2.546 was broken overnight. NG has since bounced.

Gold might be short-term bullish now that it broke above 1240.20, but needs to blast through 1250 on major volume. The rest are red.

S&P Outlook:
One of the last tweets of the day was "If below $SPX 2360 area, 2343 looks juicy." So there's that potential as of the open.

Or, there's still the potential for the higher Fib zone at 2373.89-2379.39 to get tested.

Either way, it doesn't fee like the bull run is over. It may just be getting more complicated.

Have shifted to a mix of SPY puts and scalping SSO against them, scaling in and out. Trying to take money from both sides while keeping risk small.

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