Two weeks after the Russell 2000 breaks out, November’s data shows big improvement in small-business profit trend. Job openings is another data point worth watching. Small-business openings currently are diverging with the national trend. The recent breakout in small-caps is … Continued
The Russell 2000 has broken out. There are many reasons to doubt the breakout – ranging from elevated valuations to falling profit estimates to several soft economic data points. But as long as the breakout remains intact, bulls deserve the … Continued
Following futures positions of non-commercials are as of December 3, 2019. 10-year note: Currently net short 221.9k, up 76.2k. Next week, the FOMC meets. It is this year’s eighth and last meeting. Markets do not expect the Fed to move. … Continued
Following futures positions of non-commercials are as of November 26, 2019 (data was published Monday instead of last Friday due to Thanksgiving holiday). 10-year note: Currently net short 145.7k, down 37.8k. In the last nine weeks, the Federal Reserve’s SOMA (System … Continued
Small-caps broke out last week. This comes amidst earnings deceleration and softening in several macro data. If things turn up as they did in early 2016, bulls would have been vindicated. Their conviction level will be put to test by … Continued
Markets have been in dichotomy, with large-caps leading and small-caps lagging. Bulls were hoping the former would pull the latter along. But risks are rising things will evolve the opposite way. It is early, but subtle signs of fatigue are … Continued
Following futures positions of non-commercials are as of November 19, 2019. 10-year note: Currently net short 183.5k, up 34.7k. Interesting dynamics are in play in the sovereign bond market. In the 12-months to October, US budget deficit crossed $1 trillion. … Continued
The 12-month total of US budget deficit just crossed $1 trillion. Treasury issuance is well over $900 billion. Foreigners at the same time have been reducing exposure to US notes and bonds. If the trend persists, this is bound to … Continued
Yet another week and yet another record in the S&P 500, although the Russell 2000 is not in confirmation. Sentiment is complacent, some metrics frothy. But it can get frothier. This also means buying protection is cheap. The US economy … Continued
Following futures positions of non-commercials are as of November 12, 2019. 10-year note: Currently net short 148.8k, down 82.7k. TLT (iShares 20+ year Treasury bond ETF) peaked at $148.90 on August 28, ending the week at $137.76. Since that peak … Continued