The upsurge yesterday in the VIX, which closed above its recent high and also moved above the 200-day EMA, is even more remarkable in that the actual declines in the stock indices were relatively modest.
Clive Corcoran is monitoring the technical deterioration that is taking place in some large-cap, widely-owned stocks, such as GE, AMGN, INTC, ADBE and Ford among others.
The ETF for the energy sector XLE closed at an all-time high Tuesday. The sector fund includes not only several of the biggest oil stocks but also some exposure to gas and the oil services sector.
A new all-time closing high was registered for the Russell 2000 index (^RUT) as it outperformed the other indices with a 1.9% gain. This suggests that, while there may have been much short covering that helped to power the gains in the larger cap indices, there seems to be a healthy appetite amongst the long only portfolio managers to put new money to work.
The economic fundamentals continue to point to more of a slowing than may have been discounted yet, and Treasury yields are reaching back to the lowest levels of the year when short-term rates were below where they are today.
The economic data is confusing, the dollar continues to slide, and the Treasury markets are not buying the inflation scenario that Fed governors seem to be worried about.
We are in the midst of a lot of contrasting data, which seems to alternate between either pleasing the soft landing scenario advocates or raising awkward questions for them.
With plenty of market data to digest this week, the volatility genie appears to be out of the bottle and Clive Corcoran expects to see whipsaw sessions in coming days and would not rule out a test of the 50-day EMA's on some indices before the week is done.
Clive Corcoran writes that the Federal Reserve being inhibited in its future monetary policy by the need to provide an underpinning for the US currency has not been adequately discounted in the soft landing scenario.
Copyright 2024 Tiger Shark Publishing LLC . All rights reserved.
It should not be assumed that the methods, techniques, or indicators presented on these websites will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these websites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, Tiger Shark Publishing LLC, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.
Free Festival of Traders Videos
full story
printer version