Please enable javascript in your browser to view this site!

Minor losses in Equity futures on Quad Expiration- Tough to rule out Retest

Ahead of today's Housing starts, Quad expiration, we see minor losses in US futures, while most of Europe is marginally positive along with Asia- Bond yields are rising this am while Crude is higher by nearly 2%.  The trend from 6/8 lows remains down and yesterday's rally, while constructive, didn't make sufficient progress to think lows are in , so could easily get a retest of lows into early next week before real bottom is at hand.  Technically, we seem to be getting close, as counter-trend signals of exhaustion are close for both Equities, TNX and USDJPY while Financials have also shown similar signs of trying to bottom out as Yields have gotten stretched and seem close to bouncing-  OVerall, we haven't seen sufficient deterioration to grow too negative on the market for a big move down on BREXIT fears, with indices still well above May lows, and while the near-term trend remains negative, downside should prove minimal into next week=  Key areas to watch,  2050-2 and then 2030-3 area, while 2081-3 necessary to get above on the upside to have any sort of confidence about lows being in.  Look to buy dips when given the chance in today and into next week-  Key gainers this morning are RDEN, PRTK, LL, SWHC, while CMTL, SEMG, INNL are down-  Let me know if I can answer questions

Minor stabilization in equities , but trend still down from 6/8 and yesterday wasn't sufficient thus far to think a bigger low is in place.   Futures have support near 2050 and then 2032-5 and would require a move over 2082 to think potentially the pullback might be postponed.

 

JPY is near support where counter-trend rallies could get underway, as early as next week.  Overall this has moderate importance for equities, so important to see how USDJPY acts, as counter-trend signals are now present which have occurred at lows in the past, and are within 2-3 days for both TNX and SPX

Credit Suisse's Fear index hit the highest levels in the last decade- (AS shown in Daily shot)- This Barometer measures sentiment for 3 mth horizons by pricing a Zero Cost collar, Selling a 10% Out of the money Call and using proceeds to buy an Out of the Money (OTM) put.  The level coincides with how far OTM the SPX put is.  The higher the level, the greater the fear.