Happy Friday folks! Let's get right into it today. US Futures traded relatively flat in the overnight session with the Dow down -0.12% to 34,420, the S&P down -0.11% to 4,233, the Russell up 0.29% to 2,315, and the Nasdaq up 0.07% to 13,969 as of 8:30AM.
Yesterday's PA came as a bit of a surprise to trading desks across the Capital Markets, as the typical reaction to red hot inflation is a more hawkish shift in policy and an increase in the cost of servicing debt, pulling a significant amount of flows away from growth heavy indexes such as the Russell and Nasdaq, leading to more defensive positioning at the very least. However, sans the light selling on the Russell, what we saw was next to no fear at all, or demand for risk protection for that matter. Markets and particularly market signals are completely broken right now it would appear, as Billionaire Stan Druckenmiller rightly pointed out shortly after the red hot data.
The best performing trading strategy over the past year has been buy and hold. So in other words, doing absolutely nothing but remaining as risk on as possible, this entire time, which many, if not most, retail traders have done, has outperformed hedge funds by 10 to 1. In my honest opinion, this is no longer a "market," far less an efficient or free market.
The US10Y yield continued to fall as bond markets bought the Fed narrative of transitory inflation, and almost completely ignored Thursday's highest CPI print since 1992. The Dollar (DXY) rose 0.32% to 90.35 showing potential signs of derisking in growth, while Vix slipped back to a 15 handle, and is sitting at the lowest level since before the March 2020 lockdown crashed markets 35%. Gold is sitting just below 1,900 around 1,890 and is down -0.30% on the day, while Bitcoin (BTCUSD) rose 1.38% to 37,215. Finally, USOIL rose 0.11% to 70.16.
thanks Mate👍 if u check the History of Indicies in USA,about 4,5 times the Bear Cycle started at month of July and I think this Year gonna be the same.
Hedge_Of_The_World
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@Financier_Guy, Interesting, it would be more than good timing if either in June or July we saw a correction, not just given Vix levels, but given the amount of time we've spent 2+ standard deviations above the mean across the majors on the longer time frames such as the 3 month. Q2 is going to disappoint no question...
Financier_Guy
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Of Course it would makes sense at least after all of these non senses chain of Market Behavior 😁 Frankly im believe Q2 is Akward but like Q1 markets wont show any reaction and Then at end of Q3 will be a Sharp move in all Sectors. And I Believe Rising in Energy sector that we are seeing is not gonna Last long! Early Sep or Mid Sep gonna be intresting
Financier_Guy
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and as your chart the Volume in May was Totally Bearish and After that there is no Volume and the recent rise was without any huge volume so it means Institutions still believe in Sell in May And Run Away 😁
EBITDAtiger
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I was so surprised that the markets stayed that calm after such a hot CPI number. Great recap!
@OptimoomFX, Anytime, my friend. Thanks for the comment!
pechi123
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With the rallies fading each time but still holding support makes congestion, like a spring ready to uncoil, the question is in what direction. The transports have been heading lower since May 10th either now in wave 3 down or wave C of a correction, Russell is just under the 3/15 high made nearly 3 months ago, and 5 waves might be complete, either it is rounding a dome under 3/15 high appearing like a H & S, or coiling to shoot higher. The overall market supports a bullish interpretation with advance/declines consistently making new all time highs despite the subdued gains in the indices, and the VIX has been making consistent new lows. On the other hand the Put/Call ratio mostly has been near its' multi-month lows with exception the past 2 days within normal range, that can be a contrarian indicator.
if u check the History of Indicies in USA,about 4,5 times the Bear Cycle started at month of July
and I think this Year gonna be the same.