Potential VIX Breakdown Near-Term Opportunity For Equity Bulls, But Volatility Curve In Contango Medium-Term Risk

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VIX is on the verge of a breakdown. After sustaining over 20 for a year, it risks losing that level in the sessions ahead. A decisive breach opens the door toward mid- to high-teens near term. This will have taken … Continued

3-Week Selloff Pushes Major Equity Indices To Crucial Support – Opportunity For Bulls To Step Up And Defend

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Major US equity indices took it on the chin last week. Medium- to long-term, there is more to go on the downside – if nothing else just to unwind overbought conditions. Near-term, in the right circumstances for bulls, a relief … Continued

Bulls, With Momentum, Need Several Non-Cooperating Metrics To Cooperate Better, Else…

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With momentum on their side, equity bulls hope metrics such as money-market funds, margin debt and even foreign buying of US stocks begin to cooperate better.  In this scenario, volatility, already suppressed, is vulnerable to another leg lower.  Non-commercials are … Continued

With Fresh Highs In Major Equity Indices, Momentum Lies With Bulls, But…

US Manufacturing has contracted for three months now.  Markets are not a least bit bothered.  They are hoping the Fed’s three rate cuts this year would boost a decelerating economy.  In the futures market, non-commercials are betting with record net … Continued

Sharp ↑ In Investor Complacency, U.S. Stocks’ Path Of Least Resistance ↓ N/T

After a 13-session, heady rally off June 27th lows, U.S. stocks are beginning to reek of complacency.  The question is, is it now time to turn contrarian or things might stay complacent for a little while longer? Take put-to-call ratios. … Continued

CoT: Peek Into Future Through Futures

The following are futures positions of non-commercials as of June 21, 2016.  Change is week-over-week.  (Please note holdings are prior to non-commercials’ potential Friday reaction post-Brexit win.) 10-year note: There goes any sliver of hope for a rate hike in … Continued

Risk/Reward Favors S&P 500 Shorts Near- To Medium-Term

The chart below (Chart 1) caused a lot of stir last Friday – across asset classes, primarily in the U.S., and elsewhere. The U.S. economy only added 38,000 non-farm jobs in May, much weaker than expected and the lowest monthly … Continued

CoT: Peek Into Future Through Futures

The following are futures positions of non-commercials as of May 3, 2016.  Change is week-over-week. 10-year note: Last week, the Bank of Japan shocked markets by not adding to its stimulus program.  The yen jumped 2.4 percent.  This week, the … Continued

CoT: Peek Into Future Through Futures

The following are futures positions of non-commercials as of April 26, 2016.  Change is week-over-week. 10-year note: Two different central-bank meetings, and two different market reactions this week. Haruhiko Kuroda, Bank of Japan governor, has a habit of surprising the … Continued