VIX Unable To Hold Rallies, But At Lower Bound Of Dual Trend-Line Support

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Volatility bulls have not been able to sustain rallies. Amidst this, non-commercials have been quietly reducing net shorts in VIX futures. If the past is any guide, VIX does not peak until these traders go net long or get close. … Continued

Potential VIX Breakdown Near-Term Opportunity For Equity Bulls, But Volatility Curve In Contango Medium-Term Risk

posted in: Credit, Derivatives, Equities, Technicals | 0

VIX is on the verge of a breakdown. After sustaining over 20 for a year, it risks losing that level in the sessions ahead. A decisive breach opens the door toward mid- to high-teens near term. This will have taken … Continued

Risks Growing Lagging Small-Caps End Up Pulling Leading Large-Caps Lower

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

Bulls, With Momentum, Need Several Non-Cooperating Metrics To Cooperate Better, Else…

posted in: Credit, Derivatives, Equities, Technicals | 0

With momentum on their side, equity bulls hope metrics such as money-market funds, margin debt and even foreign buying of US stocks begin to cooperate better.  In this scenario, volatility, already suppressed, is vulnerable to another leg lower.  Non-commercials are … Continued

With Fresh Highs In Major Equity Indices, Momentum Lies With Bulls, But…

US Manufacturing has contracted for three months now.  Markets are not a least bit bothered.  They are hoping the Fed’s three rate cuts this year would boost a decelerating economy.  In the futures market, non-commercials are betting with record net … Continued

Nasdaq 100 Reaches New High Last Fri, S&P 500 Itching To Do So; Left Curveball Could Come From VIX Futures In Due Course

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The S&P 500 is itching to make a new high.  The Nasdaq 100 achieved that feat last Friday.  Lowered earnings estimates for the third quarter went a long way, among others.  Bulls have momentum right now.  Medium- to long-term, massive … Continued

Non-Commercials’ Record Bet On Lower VIX Could Get Vindicated N/T If Russell 2k Reclaims 1600

Inventory burn likely weighs on growth in future quarters, casting doubt on the sell-side’s expectations for a pick-up in earnings growth momentum as the year progresses.  This is a medium- to long-term issue.  Near term, recapturing of 1600 on the … Continued