SPY Rejection (Again) at White Channel Resistance
Hey guys, sorry I missed you yesterday, I had a busy day of meetings and was away from my desk. Let's get right into it this morning. US Futures are struggling to hold on to the (weak) overnight gains, which saw the majors bounce between quarter and half a percentage point as of 8:30AM. We saw jobless claims come in hot at 779k claims, but better than the 825k expected, along with 4.592MM continuing claims. I love how analysts are still expecting over 800k claims each week, while they simultaniously, and almost unanimously, suggest that the economy has recovered. When all this debt binging ends, (if ever), and stimulus payments aren't enough to replace GDP, what then? NIRP? According to the ECB, banks should start preparing for NIRP. I guess the ignorance at the central banking level knows no bounds. On another note, unit labour costs came in more than double the expected 3.3%, at 6.8%.
Vix continues to get battered, and is back at the ascending support trendline, and descending green dotted trendline, which went from resistance to support on Jan 27th. We should see strong demand for risk protection at these levels, especially considering the dollar (DXY) is extending it's recent breakout, and hit a new high of 91.485 moments ago. We're now seeing some light selling as we approach the open. But, with rates (10Y yield is retesting the recent highs, and we saw a 1.155% print earier this morning, before pairing some gains), and the dollar gaining momentum, we may continue to see pressure on bond markets, and equity valuations in the near term.
Gold has lost the 200 day MA ($1,851.32), and is looking quite bearish at the moment around $1,819/oz. We're in a medium term descending channel, and the recent low is back in play at $1,764.73. Silver is also taking a beating, with the SLV back at a 24 handle, after hitting a 27 handle on Monday. Bitcoin is looking strong, but also may be topping, as we revisited a 38k handle this morning, while Ether almost caught a $1700 handle earlier on.
SPY continued it's rebound yesterday, with another solid, but short lived retest of the upper band of the white channel (around 383.70). The 21 day EMA, is sitting at 377.60, and barring a break above the white channel, this is the next logical target, which suggests a notable pull back in the immediate term. We're also seeing quite a few light supports on the hourly, with the 21EMA (h) at 380.64, the the 50 MA (h) at 379.16, and the 200MA (h) at 376.87. The lower band of the white channel is now sitting around 372, and has seen persistently heavy support at this level. This is my target for EOW. We look poised to open near the gamma neutral zone, around 383, and we'll see if upper white channel resistance can hold off the infinitely deep pocketed bulls. If the bears successfully defend this level, we're going lower...
Thanks for your time today guys, and I hope you enjoyed the analysis! Stay tuned for our live daily play-by-play to begin shortly at www.hedgeoftheworld.com/live-analysis. Cheers, Michael.
*The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
Vix continues to get battered, and is back at the ascending support trendline, and descending green dotted trendline, which went from resistance to support on Jan 27th. We should see strong demand for risk protection at these levels, especially considering the dollar (DXY) is extending it's recent breakout, and hit a new high of 91.485 moments ago. We're now seeing some light selling as we approach the open. But, with rates (10Y yield is retesting the recent highs, and we saw a 1.155% print earier this morning, before pairing some gains), and the dollar gaining momentum, we may continue to see pressure on bond markets, and equity valuations in the near term.
Gold has lost the 200 day MA ($1,851.32), and is looking quite bearish at the moment around $1,819/oz. We're in a medium term descending channel, and the recent low is back in play at $1,764.73. Silver is also taking a beating, with the SLV back at a 24 handle, after hitting a 27 handle on Monday. Bitcoin is looking strong, but also may be topping, as we revisited a 38k handle this morning, while Ether almost caught a $1700 handle earlier on.
SPY continued it's rebound yesterday, with another solid, but short lived retest of the upper band of the white channel (around 383.70). The 21 day EMA, is sitting at 377.60, and barring a break above the white channel, this is the next logical target, which suggests a notable pull back in the immediate term. We're also seeing quite a few light supports on the hourly, with the 21EMA (h) at 380.64, the the 50 MA (h) at 379.16, and the 200MA (h) at 376.87. The lower band of the white channel is now sitting around 372, and has seen persistently heavy support at this level. This is my target for EOW. We look poised to open near the gamma neutral zone, around 383, and we'll see if upper white channel resistance can hold off the infinitely deep pocketed bulls. If the bears successfully defend this level, we're going lower...
Thanks for your time today guys, and I hope you enjoyed the analysis! Stay tuned for our live daily play-by-play to begin shortly at www.hedgeoftheworld.com/live-analysis. Cheers, Michael.
*The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
