Taiwan's Stock Exchange Index just saw it's biggest market crash in 54 years according to ZeroHedge, falling 9%. Needless to say margin levels are at historic high's, so the bleeding has only now begun as potentially ugly margin calls commence.
US CPI data came in (extremely) hot moments ago. We saw a rise of 4.2% YoY after CPI rose by 0.8% in April vs the 0.2% expected. This was the biggest YoY jump since September 2008, and the biggest MoM jump since June 2008. Core CPI rose 3% YoY, with a MoM rise of 0.92%, the largest MoM rise since 1981. Transitory though, right Powell? What a crock of shit.
The US10Y yield is approaching 1.65%, and we're possibly looking at a cup and handle, with a vicious breakout soon, sending stocks spiraling at the worst possible time. We saw the dollar rally hard (0.30%) to 90.41, catching support at the February low around 90.
The Vix hit an HOD of 23.9 moments ago, before cooling back to 23 as of 9AM. We've clearly broken out of the descending trendline formed from the March top, putting our target of 30 in play this week. A retest of the 21 support level is possible, but unlikely given this morning's negative sentiment after the ugly CPI print.
QQQ is set to open below the 100DMA which was recaptured yesterday before we saw a rejection at the 50DMA. SPY is set to open at the red line support around 411, with the 50DMA potentially coming into play as early as today at 403.62. IWM is also poised to open below the 100DMA, which was recaptured yesterday before the close, bringing the March 25th low around 208 into play. The 200DMA is sitting all the way down at 190, so hold on to your hats if we see an ugly open like we did yesterday. Growth in particular is going to suffer today, with value likely seeing a BTFD parade.
Later on around 10:30AM we'll see Crude Inventories, then around 2PM we'll see the latest Treasury Budget balance.
* I am/ we are currently holding positions in UVXY, HUV.
Nice work here! What does the plunge protection team have left in their arsenal? How do you solve a debt problem with more and more debt? Just print everyone up a few mil and we are golden? MMT is an absolute joke.
Hedge_Of_The_World
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@Whitey75, Completely agree. It's a magic trick. Stagflation here we come!
dtingbudong
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Certainly I think we'll sell off hard tomorrow again, but I think we'll bounce and go back near but not quite to all time highs to fool bulls and liquidate bears. 4000 has never been retested from the top, despite it serving as mult-month resistance, and so it would be surprising not to see a significant bounce there.
Steversteves
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@dtingbudong, I find it so comical seeing people anthropomorphize the stock market. Like its some omnipotent and omniscient being set on destroying people. As my previous (and current part time) work was/is as a psychiatric NP, I understand the natural inclination for people to find meaning in meaningless happenstance. However, I find it really laughable when people are like 'The market is out to get you! Trick them bears and full them bulls". No. The market is a reaction to peoples (both institutions and retailers) sometimes irrational appraisal of situations and environmental context (i.e. politics, fundamental data, etc.). When people (again institutions and retailers) do something (buy or sell) that causes a stock to move, its not to 'trick' or 'trap' other investors. They honestly do not care about retail investors or other institutions. They make actions that they feel will benefit themselves in some way.
Furthermore, retail traders, at least decent ones (to which I do not claim to be one), play based on the action of the equity itself. Thus, they skillfully play both long and short, bull and bear sometimes simultaneously.
Also, one is not instantly better than the other. Institutional investors are bought a large group of retail investors working in pursuit of profit for a corporate endeavor. And while institutions have 'AI', unfortunately because the markets are shaped by the irrationality of the human condition, 'AI' is not the be all and end all. Hence why no institution has been able to provide people with more than modest returns on their investments.
Think logically.
dtingbudong
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@Steversteves, The S&P 500 index futures are largely algo-driven particularly in the overnight session (where we did dip to 4030 and possibly trap some bears). A lot of these algos are based on orderflow levels, and trickery is certainly part of the game. I follow some orderflow traders, and human or machine-based trickery is definitely a factor around playing these levels. These guys are definitely sharks who are out to take your money if you're not careful - believe me, I got fooled (trapped at the far end of a swing high/low a few times) before getting wiser to the game.
You're thinking the S&P 500 index is an impersonal, collective index of large stocks with many players; it is, in theory. however, I believe institutions tend to buy/sell in the dark pools and thus are not part of the tape you see. Furthermore, the main intra day market action itself is driven by the futures market which is dominated by a few large whales who manipulate it (much like Bitcoin).
dtingbudong
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@Steversteves, Another thing to consider is that the S&P 500 index (SPY, SPX, /ES) algos also act on the behavior of the VIX - which is definitely a single instrument which can (and is) manipulated - ever heard of VIX crush Friday? You think VIX Crush Friday is caused by a "large group of retail investors working in pursuit of profit for a corporate endeavor"?
jojofang0901
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yea agree with the down move from the price :) will monitor more thx
Financier_Guy
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and Imo in 2021-22 most of investors wealth will be transfered to SSE ! and its their turn if You Look at SHCOMP it's been long time since last Bull market in Shanghai Composite!