Red Alerts Trigger This Morning
You’d think this should be a horrible morning for bears, but it ain’t. I’m not talking about the reversal in NQ, ES and YM. They spiked up on the cooler CPI. Cleveland Fed was wrong, bigly. They were 0.1 percent above consensus and the consensus was 0.1 percent above the reported number. Everything ramped on the news, but only RTY stuck the landing. NQ, ES and YM crumpled.
Whether those indexes move up or down from here doesn’t matter to the signals that have triggered.
First, the one that stuck.
It’s rate cuttin’ time!
Second, the one that didn’t, but directly tied to the above chart. My alert is on the chart below, and it says the following: Buy All the Puts You Were Planning to Buy on Canadian Banks
This signal did not stick. It might have been bad data, a glitch by the site or a brief divergence between the two interest rates. When this breaks out, The Steepening will be underway in Canada.
Signals Everywhere
QQQ and NQ both have blow-off top signals ON today, despite being red. This signal will not hold into the close if losses mount. The weekly is still on.
Lilly lost the daily signal at the morning low. If it falls below $930 it should go off. This one has been very stubborn. XLV might be a good short up here if it cannot make a new high. Since it is considered defensive, and both JNJ and UNH sport huge bearish topping patterns, it could catch a bid from long-only managers looking for hiding spots. XBI and IBB gapped up too, with IBB making a new 52-week high. There’s certainly chart potential for gains here, but need to see more.
Similarly gold miners. If it goes below yesterday’s close, I consider this a potential failed breakout in the making.
Similarly housing. I’m not crazy about this line, more of a hunch that today is merely short-covering.
Maybe a little room for more looking at the DHI 0.00%↑ chart
I picked up 2 DTE (now 1 DTE) COST 0.00%↑ puts yesterday. CPI went opposite the way I was hedging against, but the market move is in the direction I was hedging for. They are more than 15x at the moment, well into the money.
Small-caps have performed terribly with high interest rates and are spiking on the news that it’s rate cutting time. I don’t know how long this phase will last. The Fed started cutting in the summer of 2007 and the market didn’t top for a couple of months. RTY should outperform in this bullish window. It could shut tomorrow for all we know. For now, I’m assuming this is short-covering, but not shorting it yet.
