The ECB leaves rates unchanged at 0.75%. Draghi says he will remain accomodative as the press conference continues. The euro drops under 1.28. The BOJ is firing the money bazooka with both barrels weakening the yen as shown by the big jump in the dollar/yen and euro/yen pairs. The Japan 10-year yield is now at 0.436%. The markets are writing epic economic history this year. The big move this morning is the 10-year Treasury yield dropping from 1.82% to 1.77% over the last three hours. Money is chasing into bonds and the 'great bond rotation' is on a milk carton. As would be expected, with money moving from stocks to the bond market, the S&P futures give up all the gains from this morning and are now flat. The important move yesterday, that went relatively unnoticed by media, was the drastic drop in semiconductors, now down about 4% in only three days. Chips are in almost any product you buy these days, so if chips are not needed, what does that tell you? Mining and metals continue to break down but the flush yesterday may actually serve to help the long players in these areas by placing a wash-out bottom. Gold is at the critical 1550-ish support level highlighted in yesterday's charts, time to bounce or die. Weak copper and commodities may finally create broad market weakness.
Jobless Claims are worse than expected dampening the bull's early optimism. The Fed's Lockhart chimes in following Williams yesterday saying that QE may be tapered this summer. Obviously, the Fed is now paying attention to the dividend, blue chip, utilities, healthcare, home builders and high-yield corporate asset bubbles it is creating with its detrimental QE4 Infinity and Beyond policies. Watch SOX 425 (now at 416 creating market bearishness), VIX 14.50 (now at 14.21 creating market bullishness) and XLF 17.80 (now at 17.92 creating market bullishness). The bulls will be happy and the markets will recover strongly to the upside if the SOX moves above 425. The bears will kick the market downside into high gear if the VIX moves above 14.50 or if the XLF moves below 17.80. If both give way, the SPX will easily venture down towards the 1520's and 1530's. Keybot the Quant is short now so watch for any potential whipsaw today. If SOX stays under 425, Keybot will very likely stay short even if the equity markets move higher.
For the SPX starting at 1554, the bulls need to push above 1571 to regain control. The bears need to push under 1550 to accelerate the downside. A move through 1551-1570 is sideways action today. Natty Gas Inventories are at 10:30 AM but that is the only remaining data today. Thus, the Fed's language, North Korea, and Cyprus and Italy news will impact markets today. As the day moves along, traders will position themselves ahead of the all-important Monthly Jobs Report at 8:30 AM EST now only 23 hours away. Typically, when the markets experience a large Wednesday sell off, markets remain weak into Thursday. This factor has provided a couple false signals over the last year so it will be interesting to see if a lower print occurs for equities today, as compared to yesterday, or not.
Note Added 9:57 AM: Markets start the day on a positive note, the SPX is at 1560. SOX is 418 so the bears are happy. VIX is 13.96 and XLF is 18.06 so the bulls are happy as well. Markets are in a standoff and will idle along at these levels until one of those three parameters flinch. UTIL is now at 511 as the ute bubble pumps higher. The 10-year yield remains under 1.80%. Gold fights at the 1550-ish support level. The euro is 1.2849 moving up with equity markets moving higher. TRIN is 0.72 (under 1.00) so the bulls are in control today. Time to ponder the situation over a slice of blueberry pie.
If you lived in Texas, you could have some Amy's Mexican Vanilla ice cream on your blueberry pie. That's worth more than a few nasty whipsaws.
ReplyDeleteThat sounds tasty. Keystone has already reached his pie limit for today.
DeleteIn addition to being fantastic, this blog is also delicious. There's constant mention of desserts, which makes anything more appealing. At the risk of asking a dumb question, what are these references about? Are bears more predisposed to eating pie whereas bulls fancy creme brulee? Thanks.
ReplyDeleteBK
Well, bears are known connoisseurs of blueberries, but they're generally less excited about processed foods and carbohydrates. They say if you go camping you should keep your food stashed in a tree, where the bears can't get to it. That's really a load of crap though, because bears are pretty climbers and it just pisses them off. I wouldn't want to be there if they fall out.
DeleteThat's funny. No, the references to pie, or hammock time, since Keystone is looking forward to the warmer weather, and the hammock can be placed between the oak trees for summer relaxation, are simply a way to say Keystone is taking a break. Other writing sometimes has subliminal meanings but not the pie or hammock references. Keystone used to be an avid camper and woodsman prior to the accident but not anymore, at least until the rehabilitation is complete over the coming months and perhaps years. But the main reason you place the food in a tree away from your tent is that you do not get eaten by the bear when you are sleeping. If you keep food in the tent the bear will smell it and tear the tent down with you in it, which obviously will lead to some wounds, or death. So you typically place the food in a sack, everything including any candy bars, and hoist it up above the ground with a rope about 50 yards from camp. The bears can climb trees (black bears) but they will not be able to get the food hanging by a rope, unless perhaps it is the Albert Einstein of bears. But keeping the food in a tree is for safety on the hiking trail. Happy hiking.
DeleteDuly noted. With this in mind, where should I hide my pies going forward? And does it matter what fruit the pie is made out of?
ReplyDeleteBK
No need to hide pies, simply eat them.
DeleteWhat do you think Yogi was looking for in all those picnic baskets?
ReplyDeleteYou sound like you know your way around the woods Al, yep, you keep the food away from yourself so Yogi does not look at you as lunch.
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