Nasdaq “Hull Breach”

As Tyler reports in ZeroHedge, markets are on the ropes: https://www.zerohedge.com/markets/nasdaq-crashes-through-critical-resistance-gives-march-gains Things have accelerated south as the day wears on, with US equities all down hard led by a 2.5% plunge in big-tech. Nasdaa is now down almost 1.5% since the end of February (and down almost 5% from Monday’s exuberant highs)… The losses spedContinue reading “Nasdaq “Hull Breach””

Hull Breach

Tim Knight (Slope of Hope) enumerates the support breaches: https://slopeofhope.com/2021/03/index-omnibus.html#more-194173 With the giant reversal taking place today, let’s take a fresh look at some important indexes, in alphabetical order. First is the $COMP, the Dow Jones Composite. This cracked through its trendline on Friday, but it has sprung right back above it. We’ll see ifContinue reading “Hull Breach”

Ron Burgundy: Boy, that escalated quickly. I mean, that really got out of hand fast.

Was looking so good right up to crashing support. Wedges in bonds and stocks, to be precise. Can you say “fear and loathing?” I see a red door and I want it painted black. Count on Tim Knight (Slope of Hope) to explain this in metaphysical terms we can all understand: https://slopeofhope.com/2021/02/the-problem-with-distortion.html My point isContinue reading “Ron Burgundy: Boy, that escalated quickly. I mean, that really got out of hand fast.”

ERCOT Margin Call

ERCOT is a “just-in-time” energy market without a capacity market and missing the ability to “call” adjacent systems or ready-to-go capacity to cover supply shortages. And so, – surprise, surprise – market clearing prices can get rather spikey when confronted by high demand and limited capacity. As reported by Zero Hedge: https://www.zerohedge.com/commodities/texas-grid-operator-warns-defaults-credit-crisis-develops The Texas energyContinue reading “ERCOT Margin Call”

Mind the Wedgies

Wedges are characterized by a contracting range in prices coupled with a trend – upward is a “rising wedge” while downward is a falling wedge. Wedges are transitive – they form near the top or bottom of a trend and often resolve within ~4 weeks. In the case of an upward trend, resolution can triggerContinue reading “Mind the Wedgies”

Cross-Asset Complacency at 20-yr High

What can possibly go wrong? Well, here’s JPM’s John Normand ,head of cross-asset strategy, (courtesy of ZeroHedge): https://www.zerohedge.com/markets/complacency-20-year-highs-jpm-models-warn-imminent-correction Current readings for individual indicators and the composite are summarized in charts 3 and 4. In Chart 3, four of the seven cross-asset measures have moved beyond the levels that have preceded previous corrections (short and long-term valuation, positioningContinue reading “Cross-Asset Complacency at 20-yr High”

The New Normal: Higher VX Summer Prices and Excessive Contango in VX Futures

Evil Speculator: https://evilspeculator.com/the-new-old-normal/ Implied volatility has been dropping faster than an ACME anvil over the past two weeks, which stands in stark contrast to what I am seeing in the bonds market so the jury is still out whether or not we are looking at some bifurcation here (strange things happen sometimes) or if riskContinue reading “The New Normal: Higher VX Summer Prices and Excessive Contango in VX Futures”

Deja Vu All Over Again: 50 DMA Reconnects

February 2020: February 2021: Sven Henrich (Northman Trader): https://northmantrader.com/2021/02/09/signal-fire-3/ No, this market is really not behaving that much differently from the one that led to the February 2020 top. Back then of course the Fed too was printing running their Repo program having cut rates three times already, now of course printing still $120B aContinue reading “Deja Vu All Over Again: 50 DMA Reconnects”

Resisting Your Bearish Impulses

Evil Speculator (https://evilspeculator.com/the-skew-must-flow/) offers some great truths: Markets move 87% of price in only 11% of the time, that is both combined to the up side and the down side. Within that 87 percentile markets either go UP or push SIDEWAYS 80% to 90% of the time. This means rising or range bound markets representContinue reading “Resisting Your Bearish Impulses”

A Funny Thing Happened on the Way to Wall Street

Per Slope of Hope: https://slopeofhope.com/2021/02/a-funny-thing-happened-on-the-way-to-wall-street.html#more-193031 Originally published by friend-of-Slope MoleCool, AKA EvilSpeculator: So a funny thing happened on the way to Wall Street last week. A rabid rabble of Robinhood retail rats on Reddit took advantage of a perceived market inefficiency in Gamestop (GME) and decided it would be a fun idea to drive up the stock and in theContinue reading “A Funny Thing Happened on the Way to Wall Street”