US Futures drifted lower overnight, after seeing new all-time high's, with the S&P, Dow, and Nasdaq all down around 0.15%. European and Asian markets traded mixed, with the DAX and IBEX 35 (Spain) getting hit the hardest, and down around 0.50%, and 1.10% respectively. With mega tech struggling to see gains in the previous couple sessions, we may be seeing signs of the top. Small caps have been on an absolute tear lately, and the Russell is starting to go parabolic off the back of extreme risk on conditions, with the highest beta stocks seemingly the beneficiaries of most of the recent flows.
Bitcoin tagged a 48k handle this morning, as investors continued to pile into the asset after Elon Musk's recent bullish move to throw $1.5 Billion into the mix. Ether also caught a notable bid, and showed an 1800 handle, before cooling off to around 1741. The dollar (DXY) is getting hammered today, after we tested the 100 day MA (91.75) on Friday, and we're now sitting around 90.65, with the 50 day MA (90.45) acting as interim support. The 10Y yield is holding on to recent gains, but after testing a high of 1.20%, we're back at a 1.14% handle. We're still chipping along above the major MA's with the 21 day EMA acting as first support.
The Vix is up around 3% as we approach the open, but we're still looking incredibly cheap at a 21 handle. We're seeing support near the post March crash lows, but as I mentioned yesterday, we lost the key ascending trendline sitting around 23. The question on my mind at this stage is: when are investors going to start participating again, and with a potential increase in market depth in the near term (after the stimulus proposal narrative is exhausted), will this be another sell-the-news event, and will the Vix go back to a 30 handle? I think the logical answer is yes, but I also think we'll need to see the stimulus passed before we get any sort of meaningful correction.
The metals (barring Palladium) continue to rally hard on rising rates, and dollar weakness, while higher than expected inflation around the corner is also pushing Gold, Silver, Platinum, and Copper to new high's. It appears everything is on the table for bidding when inflation is driving, so hold on to your hats as a potential stagflationary era emerges. Although, I would say - rising prices, and a weak economy/labour market is not something we're necessarily new to.
Finally, SPY is looking very toppy after tagging a 390 handle, and we're looking at an hourly RSI of 75 at the moment, showing extreme overbought conditions. Having tested the top of the channel at 390, and with the subsequent rejection we were issued, we may finally be seeing the last new ATH...
Thanks for your time today guys! Head over to www.hedgeoftheworld.com for our live analysis to begin shortly. 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.
Bitcoin tagged a 48k handle this morning, as investors continued to pile into the asset after Elon Musk's recent bullish move to throw $1.5 Billion into the mix. Ether also caught a notable bid, and showed an 1800 handle, before cooling off to around 1741. The dollar (DXY) is getting hammered today, after we tested the 100 day MA (91.75) on Friday, and we're now sitting around 90.65, with the 50 day MA (90.45) acting as interim support. The 10Y yield is holding on to recent gains, but after testing a high of 1.20%, we're back at a 1.14% handle. We're still chipping along above the major MA's with the 21 day EMA acting as first support.
The Vix is up around 3% as we approach the open, but we're still looking incredibly cheap at a 21 handle. We're seeing support near the post March crash lows, but as I mentioned yesterday, we lost the key ascending trendline sitting around 23. The question on my mind at this stage is: when are investors going to start participating again, and with a potential increase in market depth in the near term (after the stimulus proposal narrative is exhausted), will this be another sell-the-news event, and will the Vix go back to a 30 handle? I think the logical answer is yes, but I also think we'll need to see the stimulus passed before we get any sort of meaningful correction.
The metals (barring Palladium) continue to rally hard on rising rates, and dollar weakness, while higher than expected inflation around the corner is also pushing Gold, Silver, Platinum, and Copper to new high's. It appears everything is on the table for bidding when inflation is driving, so hold on to your hats as a potential stagflationary era emerges. Although, I would say - rising prices, and a weak economy/labour market is not something we're necessarily new to.
Finally, SPY is looking very toppy after tagging a 390 handle, and we're looking at an hourly RSI of 75 at the moment, showing extreme overbought conditions. Having tested the top of the channel at 390, and with the subsequent rejection we were issued, we may finally be seeing the last new ATH...
Thanks for your time today guys! Head over to www.hedgeoftheworld.com for our live analysis to begin shortly. 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.
