Was This Week a Giant Head Fake?
The Nasdaq is puking on Friday by as much as 2%, as yields spiked back toward the recent high's. The 10Y yield traded as high as 1.616% after pairing some gains, while the 30Y yield broke out to new high's at 2.38%. Are the CTA's jumping back into short already after this week's muted long end auctions? I was wondering what investors were thinking, piling back into risk as rates hovered near their recent high's. Nothing suggested to me that the rise in yields was over, so was it all just a gigantic head fake? We'll find out very soon...
The dollar is catching a bid as well, and is approaching a 92 handle. We have strong support around the neckline (90.75), with 92.50 acting as fortified resistance. It would take a notable shift in sentiment for the dollar to break the recent high, and make it's way back toward the 94 level. With the Put/Call finally showing signs of life, something is clearly brewing under the surface. We saw PPI and Core PPI come in in-line with expectations this morning. PPI rose by 0.5%, and Core PPI rose by 0.2%. Don't tell that to the BLS, though, their data tells a very different, (fake) story.
In metals, we're seeing some weakness this morning, particularly in Silver and gold, as they've been the recipients of strong flows this week. In crypto, after testing the recent high, Bitcoin fell back to a 55k handle. We're seeing a potential double top emerge here, with a world of downside below us. The 21 day EMA is sitting around 51k, and the 50 day MA is sitting at 45k. Ether didn't quite make it to the ATH, but is also rolling over on Friday, and is back at 1740.
On SPY, the bears will be planning a retest of the lower band of the green channel as soon as the opening bell, with downside to the top of the wedge around 388, and then the 21 day EMA around 386. If we see buy the dippers out today, we'll get a strong bounce off the green channel, and potentially a retest of the ATH once again. On the Nasdaq (QQQ), we're poised to open below the upper band of the wedge around 313, potentially leading to further downside toward the neckline at 311, and then the September high around 301. On the Russell (IWM), we're poised to open flat, with high beta persistently catching retail flows, and the rotation out of big tech. We may be looking at a double top.
In Volatility, the vix caught a strong bid overnight and retested a 23 handle. We're looking at the post march crash range at the moment, which has served as a solid accumulation zone for hedgers. Keep an eye on Vix at the open, as we could be in for a rapid profit taking session/risk off reaction to the pre-market price action.
Thanks for your time today guys and I hope you enjoyed the analysis! Stay tuned as our live analysis begins at 9:30AM. Cheers, Michael.
*I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
The dollar is catching a bid as well, and is approaching a 92 handle. We have strong support around the neckline (90.75), with 92.50 acting as fortified resistance. It would take a notable shift in sentiment for the dollar to break the recent high, and make it's way back toward the 94 level. With the Put/Call finally showing signs of life, something is clearly brewing under the surface. We saw PPI and Core PPI come in in-line with expectations this morning. PPI rose by 0.5%, and Core PPI rose by 0.2%. Don't tell that to the BLS, though, their data tells a very different, (fake) story.
In metals, we're seeing some weakness this morning, particularly in Silver and gold, as they've been the recipients of strong flows this week. In crypto, after testing the recent high, Bitcoin fell back to a 55k handle. We're seeing a potential double top emerge here, with a world of downside below us. The 21 day EMA is sitting around 51k, and the 50 day MA is sitting at 45k. Ether didn't quite make it to the ATH, but is also rolling over on Friday, and is back at 1740.
On SPY, the bears will be planning a retest of the lower band of the green channel as soon as the opening bell, with downside to the top of the wedge around 388, and then the 21 day EMA around 386. If we see buy the dippers out today, we'll get a strong bounce off the green channel, and potentially a retest of the ATH once again. On the Nasdaq (QQQ), we're poised to open below the upper band of the wedge around 313, potentially leading to further downside toward the neckline at 311, and then the September high around 301. On the Russell (IWM), we're poised to open flat, with high beta persistently catching retail flows, and the rotation out of big tech. We may be looking at a double top.
In Volatility, the vix caught a strong bid overnight and retested a 23 handle. We're looking at the post march crash range at the moment, which has served as a solid accumulation zone for hedgers. Keep an eye on Vix at the open, as we could be in for a rapid profit taking session/risk off reaction to the pre-market price action.
Thanks for your time today guys and I hope you enjoyed the analysis! Stay tuned as our live analysis begins at 9:30AM. Cheers, Michael.
*I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
