US Futures are doing what they always do these days, which is melt up overnight to new ATH's, while we all sleep. Buy the close, sell the open is still alive and well. The S&P500 hit a new ATH moments ago, at 4,207.62, before cooling slightly, which implies a breakout above the ascending channel we've been stuck in since November. I'll repeat that - the bulls just broke through a 6 month resistance trendline, like it was water. I'm sure Powell will get a nice bottle of 40 year Port from his friends on Wall Street, for his incredibly dovish, albeit shaky, performance, while the rest of us working class folk, get more stick. I must say, it was pretty insane hearing Powell dismiss any rise in inflation this year. In other words, no matter what happens to inflation, it's "transitory." What a crock of sh*t.
The Nasdaq also caught a strong bid overnight, and is sitting within a few points (14,040) of the ATH (14,059). The Dow is up around 0.40%, and is forming a bulish Pennant on the daily time frame. This is interesting considering we're within about 300 points of the ATH. Are we about to see another short squeeze? Who is still short at this point, really? There may be a few of us left, but we're within the 95 percentile of long positioning in Equities, and the Put/Call is glued to the floor. Are they trying to hit the 99th percentile? WTF is the long term game plan here? The dollar's been debased upwards of 40% in a year, and still, central banks want more of our savings and wages.
On the Russell, we're seeing a retest of the left shoulder high around 2,316, and we're up around 0.70% at the moment. If we see a retest of the ATH around 2,368, the HS formation crumbles like every other bearish pattern we've observed in the past 12 months. Having said that, both the Nasdaq, and the Russell, are potentially in a topping pattern. The double top thesis on the Nasdaq is still in play, and we'll need to see how the week shapes up before we potentially reassess our bearish outlook.
The US10Y yield rose notably overnight, and retested a 1.65% handle before cooling slightly. Who would possibly want to hold long duration right now, when the Fed just promised to continue to buy everything under the sun to keep rates low, and prop up credit markets. The real yield is going deeper and deeper into negative, as inflation takes hold. However, The bond market may be on the verge of another wave of selling, putting pressure on growth (again). How long this lasts before the Fed steps in and changes the rules of the game again, is anyone's guess.
In volatility, we're seeing the Vix back at a 17 handle after whipsawing back and forth yesterday off the back of Powell's garbage rhetoric. We saw persistent selling in risk protection, as markets drifted sideways for the past 2 weeks straight. MMT, QE, Buy-backs, Fed Put, you name it, they're pulling out every stop to keep markets propped up, to maintain the appearance of a functioning economy. But, the reality is far more grim than the data and valuations might suggest. If you divide any of the indexes by the increase in M1 Yoy, you'll see there hasn't been a rebound at all. There's just been immense asset inflation as a response to a blatant, multi-trillion dollar, debasement scheme, to tax the working class, and steal their savings to save zombie companies and states. The bottom 50% of people don't own any assets at all, and central banks know this. Hence, rising asset prices ,and goods and service prices, off the back of diluting the dollar, is literally a tax on the poorest 50% of people.
On the subject of the burning dollar, we fell around 0.33% yesterday and we're sitting around 90.57 as of 7:45AM. We have support just below us around 90, near the Feb 25th low. If that breaks, the Jan low around 89.50 will come into play. If that goes, it's all over for the dollar. The daily RSI is currently sitting at 32, so we're technically in oversold territory and due for a near term bounce. I'm waiting to see if we lose the recent lower wedge support, around 91, on the weekly tine frame. That would confirm the lost support, and may potentially lead to further downside as early as next week.
I'm looking at some potential long plays here, but I urge caution given current valuations, and rampant speculation across the asset classes. High beta, meme stocks, crypto, high yield, they're all bid first when Powell gives the green light. So, I'll be watching for technical breakouts on the most shorted stocks. I'm hoping this will be enough to offset further losses on my Vix positions, and my Nasdaq short. Let's see how jobless claims look this morning, and how the market responds to this new wave of Fed induced euphoria.
Our real-time, daily market commentary and analysis begins at 9:30AM. We're now on Telegram, so you can enjoy our updates directly on any of your devices. Start your free 14-day trial today!
*I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
The Nasdaq also caught a strong bid overnight, and is sitting within a few points (14,040) of the ATH (14,059). The Dow is up around 0.40%, and is forming a bulish Pennant on the daily time frame. This is interesting considering we're within about 300 points of the ATH. Are we about to see another short squeeze? Who is still short at this point, really? There may be a few of us left, but we're within the 95 percentile of long positioning in Equities, and the Put/Call is glued to the floor. Are they trying to hit the 99th percentile? WTF is the long term game plan here? The dollar's been debased upwards of 40% in a year, and still, central banks want more of our savings and wages.
On the Russell, we're seeing a retest of the left shoulder high around 2,316, and we're up around 0.70% at the moment. If we see a retest of the ATH around 2,368, the HS formation crumbles like every other bearish pattern we've observed in the past 12 months. Having said that, both the Nasdaq, and the Russell, are potentially in a topping pattern. The double top thesis on the Nasdaq is still in play, and we'll need to see how the week shapes up before we potentially reassess our bearish outlook.
The US10Y yield rose notably overnight, and retested a 1.65% handle before cooling slightly. Who would possibly want to hold long duration right now, when the Fed just promised to continue to buy everything under the sun to keep rates low, and prop up credit markets. The real yield is going deeper and deeper into negative, as inflation takes hold. However, The bond market may be on the verge of another wave of selling, putting pressure on growth (again). How long this lasts before the Fed steps in and changes the rules of the game again, is anyone's guess.
In volatility, we're seeing the Vix back at a 17 handle after whipsawing back and forth yesterday off the back of Powell's garbage rhetoric. We saw persistent selling in risk protection, as markets drifted sideways for the past 2 weeks straight. MMT, QE, Buy-backs, Fed Put, you name it, they're pulling out every stop to keep markets propped up, to maintain the appearance of a functioning economy. But, the reality is far more grim than the data and valuations might suggest. If you divide any of the indexes by the increase in M1 Yoy, you'll see there hasn't been a rebound at all. There's just been immense asset inflation as a response to a blatant, multi-trillion dollar, debasement scheme, to tax the working class, and steal their savings to save zombie companies and states. The bottom 50% of people don't own any assets at all, and central banks know this. Hence, rising asset prices ,and goods and service prices, off the back of diluting the dollar, is literally a tax on the poorest 50% of people.
On the subject of the burning dollar, we fell around 0.33% yesterday and we're sitting around 90.57 as of 7:45AM. We have support just below us around 90, near the Feb 25th low. If that breaks, the Jan low around 89.50 will come into play. If that goes, it's all over for the dollar. The daily RSI is currently sitting at 32, so we're technically in oversold territory and due for a near term bounce. I'm waiting to see if we lose the recent lower wedge support, around 91, on the weekly tine frame. That would confirm the lost support, and may potentially lead to further downside as early as next week.
I'm looking at some potential long plays here, but I urge caution given current valuations, and rampant speculation across the asset classes. High beta, meme stocks, crypto, high yield, they're all bid first when Powell gives the green light. So, I'll be watching for technical breakouts on the most shorted stocks. I'm hoping this will be enough to offset further losses on my Vix positions, and my Nasdaq short. Let's see how jobless claims look this morning, and how the market responds to this new wave of Fed induced euphoria.
Our real-time, daily market commentary and analysis begins at 9:30AM. We're now on Telegram, so you can enjoy our updates directly on any of your devices. Start your free 14-day trial today!
*I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
