Search

EURJPY Drop Supports VIX Pop - Morning Market Squeeze

Key Tactical Takeaways:  

> As we kick off a week filled with heavy-hitting Fed speak, the benchmark S&P 500 is now firmly .... This will go uncontested against the bearish ST Noise Buffer at ...


> As DXY shows better signs of a tactical bottom, gold's inability to rotate above post-August consolidation leaves the yellow metal .... IF there is a close below ..., look for risk to shift to between ....


> Although the momentum behind this month's 1st half rotation into risk averse sectors/away from risky sectors may have ..., there's nothing to suggest that this trend of overweighting risk averse sectors ...


> In an act of confirmation for the recent breakdown in US equities, Yen strength vs. the euro is accelerating. As a result, EURJPY is growing closer to a post-topping pattern target of 121.77.


Some Quick Thoughts:


The psychological benefit of the Fed's programs to support corporate bonds in the wake of the Covid-19 outbreak simply can't be overstated. Yes, such programs do promote the rise of zombie corporations. However, defending against a wave of corporate defaults in large public companies helps ...With tame domestic credit spreads acting as the foundation of our thesis, the remainder of our technical work still supports the idea that this pullback in US equities will eventually ...


If we simply focus on the fact that markets often mean revert in response to anomalous moves either above or below a central mean, this digestion of the August surge in the tech-heavy, cap-weighted benchmark S&P 500 shouldn't ..., especially since it occurred at a time when the Fed's balance sheet was ...


With net VIX futures commercial positions as a % of open interest compared to net large speculator positions as a % of open interest increasing to levels that have accompanied VIX buoyancy in the past, this morning's push above the short-term trailing stop at 28.8 by the VIX is..., as a close above this level will ... With the safe haven yen gaining a head of steam against the more speculative euro in recent days, downside potential to 121.77 associated with the recent topping pattern in EURJPY (confirmed on 09/16) lends credence to the idea that the VIX can ...


Japan is on holiday to start this week, leaving the Nikkei temporarily immune to the carnage seen in European indices this morning (the DAX is down 3.26%, at 1-month lows). The Shanghai Comp. fell 0.63%, after failing to close above its bearish near-term stop at 3338.41. 


This is an abridged version of our premium content. If you'd like to have content like this sent to your inbox each morning, please click here to sign up for a risk-free, 2-week trial (no credit card required).


Please follow us on Twitter @xtractanalytics