Day 2 of the opinion lining up with the system. S&P and Naz push off the range lows, VIX loses its nerve, the PnF breaks out toward 7820, crude’s triangle grows up into a channel, and the Poppers lock in a loss then a profit. Storm Boelo optional.
...Both volatility indices fell more than 4% on the day before the FOMC statement, to 17.52 and 97.88, while the front end of the curve rose 2 basis points and the back eased. The textbook says event risk gets dearer into the event. Here is what would settle whether the market was right.
...The VIX fell 4.73% to 17.52 and the MOVE index 4.22% to 97.88 on the session before the FOMC statement, both at their lowest close since 21 October. The Nasdaq 100 rose 1.29% with 6 of 11 sectors lower and 65% of the move has no named cause, Boeing fell 10.69% and the Dow rose 16 points, WTI settled 99.90 and was 101.90 by 09:25 UTC.
...My direction call was right for exactly 1 day. The S&P and Naz are nudging off the range lows, the uncles are stalling, VIX has come down from its espresso high, and the SPX point and figure chart needs 7720 before the bull breakout switch flips.
...The S&P 500 rose 0.70% on a session in which 55.29% of NYSE volume traded in falling shares, 736 million of them against Friday’s 737 million on a down day. The index and the tape are a different list of companies, and the question is which one described Monday.
...The S&P 500 rose 0.70% on Monday while 55.29% of NYSE volume traded in falling shares, 736 million of them against Friday’s 737 million on a down day. New lows beat new highs on both exchanges, 70% of the index gain has no named cause, the 6-month bill rose and the 20-year fell before Wednesday’s statement.
...Carpet bombing declared and withdrawn inside 45 minutes, a VIX that can’t get through 20, and the question the community asked me over the weekend: how do you trade a market that swings like this when you haven’t got time to watch it? Trade through, or go up a timeframe. The new strategy fired 3 bullish setups on the daily chart on Friday. Crude is almost at the 104.50 bull target, Bitcoin is turning off the channel lows again.
...December WTI settled 103.27, up 3.82%, and every Treasury tenor rose or held, the 2-year by 4 basis points and the 20-year by 5, with the 2s10s spread unchanged at 31. Bond volatility fell 3.30%. A level move, not a re-pricing of the committee.
...Friday the Dow fell 653 points and the Nasdaq 100 fell 1, one session after the Nasdaq 100 fell 2.90% and the Dow held. Three quarters of the Dow’s fall has no named cause, two phone companies lost 8% on a reported conversation, December WTI settled 103.27, and every Treasury tenor rose or held.
...Once again the move was done overnight. SPX is bullish at the range lows, VIX is down to mild hysteria, crude eyes $104.50 and the sentiment charts are keeping me bullish for the moment.
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