The collision of global markets and social mood

Thursday, May 11, 2017

Thursday -- Snap, Everywhere Is La-La-Land (Except Connecticut), VIX & ISM

S&P E-mini Futures:
Testing the flat line after falling from yesterday afternoon's high.

Asia green, even China. Europe mostly red but for UK.

Moodys cut ratings on six Canadian banks... as Canada's real estate bust gathers pace.

Bitcoin up another 3% into the 1800s. Boing.

Rates higher across most markets today, ex-US.

SNAP cratered 21% after its first earnings report. The $2 billion loss was a one-time compensation to the CEO, but the numbers still underwhelmed.

Per the Marketwatch live earnings blog:

Quarter-over-quarter, revenues declined and adjusted EBITDA losses increased

Daily active users increased only 5%, forcing average revenue per user down

Total cost of revenue for the quarter was $163.4 million, greater than total revenue, up from $75.8M in the year-ago quarter

Oh....and the CEO believes everyone will go toward being a camera company, because of Snap's success.

Meanwhile, everywhere is La-La-Land:

Business is booming! The record-setting ELEVEN homes that sold for $100m or more across the globe last year - including LA's Playboy Mansion and an incredible Dallas estate

Well, almost everywhere.

"Connecticut State Capital Prepares For Bankruptcy Amid Collapse In Hedge Fund Revenue."

Another day of USD strength vs AUD, CAD, EUR & GBP. Warnings meanwhile from CHF and JPY strength.

CAD did not get below 1.36257 on its reversal, so new highs could still materialize.

Finally showing some grit. Bouncing.

WTI crude and NG ripping higher.


S&P Outlook:
As much as I like my weekly and monthly VIX average-true-range charts, here's my new favorite VIX chart, inverted ISM vs VIX, courtesy of Raoul Pal who offers a priceless insight:

Notice the building ISM divergence since 2004 as VIX makes new lows. Someday it's going to pop again.

However, at the current rate, it could still be a while. Maybe 3rd quarter. Maybe 2018.

Still not thinking we've seen the highs yet in the S&P or NDX. But as soon as we do, things could get complicated for bulls.

Still looking for puts then with a tight stop, in case it gets complicated for bears.

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