The S&P 500 on Monday broke out of an eight-week congestion, and can rally further if technicals had their way. Buybacks and margin debt are front and center. In the past three years in particular, their tailwinds have been bigger, … Continued
The S&P 500 keeps rallying to new highs, breaking down historical relationships with several metrics. It is possible the Fed’s expanding balance sheet is causing all this divergence. If it is, then the central bank will stop expanding its asset … Continued
Following futures positions of non-commercials are as of October 19, 2021. 10-year note: Currently net short 544, up 156.6k. In the 12 months to August, foreigners purchased $3.8 billion in treasury notes and bonds. As recently as February this year, … Continued
Major US equity indices all had a positive week last week, but with a varying degree of success. The S&P 500 broke out of dual resistance with bullish marubozu on Thursday and Friday, the Russell 2000 was denied at crucial … Continued
The 50-day on the S&P 500 was once again defended. Households’ equity exposure is on course for yet another high in 3Q, even as margin debt jumped to yet another record in August. Amidst these signs of excesses, the Fed … Continued
After dropping by a decent amount last week, major US equity indices are headed for a test of nearby support, which in the case of the S&P 500 is merely 0.8 percent away. Over the past 16 months, bulls’ mettle … Continued
VIX recently broke a month-and-a-half rising trend line, subsequently coming under more pressure. In the right circumstances for volatility bears, the index could drop more near term, but a longer-term trend line support is unlikely to break. On June 29, … Continued
The 2Q earnings season has gotten off strong. Stocks, having already rallied big into it, yawned. This is coming at a time when sentiment remains effusive and some of the tailwinds potentially turning into headwinds. VIX’s monthly chart could be … Continued
Corporate bond issuance was strong in the first half. High-yield, in particular, is on course for yet another record year. The Fed essentially provided a backstop to corporate bonds in March last year, setting ablaze risk-on sentiment. Corporate profits are … Continued
Buybacks made a comeback in 1Q21. Nonetheless, they are no longer as strong a tailwind for equities as they were in 2018 and 2019. Margin debt and foreigners continue to support stocks, and will pose problems once they turn. S&P … Continued