Best of the Week
Most Popular
1.US Paving the Way for Massive First Strike on North Korea Nuclear and Missile Infrastructure - Nadeem_Walayat
2.Trump Reset: US War With China, North Korea Nuclear Flashpoint - Video - Nadeem_Walayat
3.Silver Junior Mining Stocks 2017 Q2 Fundamentals - Zeal_LLC
4.Soaring Inflation Plunges UK Economy Into Stagflation, Triggers Government Pay Cap Panic! - Nadeem_Walayat
5.The Bitcoin Blueprint To Your Financial Freedom - Sean Keyes
6.North Korea 'Begging for War', 'Enough is Enough', is a US Nuclear Strike Imminent? - Nadeem_Walayat
7.Bitcoin Hits All-Time High and Smashes Through $5,000 As Gold Shows Continued Strength - Jeff_Berwick
8.2017 is NOT "Just Another Year" for the Stock Market: Here's Why - EWI
9.Gold : The Anatomy of the Bottoming Process - Rambus_Chartology
10.Bitcoin Falls 20% as Mobius and Chinese Regulators Warn - GoldCore
Last 7 days
EUR/USD and Bearish Formation on Horizon - 26th Sep 17
Why Left Wing Nuts Get Away with Murder - 26th Sep 17
BREAKING NEWS - United States Galloping Towards Nuclear War with China Proxy North Korea - 26th Sep 17
Here’s Why Turkey Can’t Stay Out Of Syria - 25th Sep 17
Hidden Gems Shows A Foreboding Stock Market Future - 25th Sep 17
10 Reason You Should Use Ridesharing To Save Money - 25th Sep 17
Commodities King Gartman Says Gold Soon Reach $1,400 As Drums of War Grow Louder - 25th Sep 17
Stock Market Mixed Expectations, Will Stocks Continue Higher? - 25th Sep 17
22 charts and 52 questions that will make you Buy Gold - 25th Sep 17
Speculation Favors Overall Higher Silver Prices - 25th Sep 17
The Advertising Breakthrough Revolutionizing Gaming - 25th Sep 17
Stock Market Forming a Reluctant Top - 25th Sep 17
Grid Forex Strategy - All You Need to Know - 25th Sep 17
Catalonia, Kurdistan, Patriotism, Flags and Referendums - 24th Sep 17
Two Key Indicators Show the S&P 500 Becoming the New ‘Cash’ - 24th Sep 17
The Felling of Sheffield's Big Street Trees 2017 - Dobcroft Road - 24th Sep 17
Advantages of Forex Trading - 24th Sep 17
Stocks, Gold, Dollar, Bitcoin Markets Analysis - 23rd Sep 17
How Will We Be Affected by a Series of Rate Hikes? - 23rd Sep 17
Fed Quantitative Tightening Impact on Stocks and Gold - 22nd Sep 17
Bitcoin & Blockchain: All Hype or Part of a Financial Revolution? - 22nd Sep 17
Pensions and Debt Time Bomb In UK: £1 Trillion Crisis Looms - 22nd Sep 17
Will North Korea Boost Gold Prices? Part I - 22nd Sep 17
USDJPY Leads the way for a Resurgent Greenback - 22nd Sep 17
Day Trading Guide for Dummies - 22nd Sep 17
Short-Term Uncertainty, As Stocks Fluctuate Along Record Highs - 21st Sep 17
4 Reasons Gold is Starting to Look Attractive as Cryptocurrencies Falter - 21st Sep 17
The 5 Biggest Bubbles In Markets Today - 20th Sep 17
Infographic: The Everything Bubble Is Ready to Pop - 20th Sep 17
Americans Don’t Grasp The Magnitude Of The Looming Pension Tsunami That May Hit Us Within 10 Years - 20th Sep 17
Stock Market Waiting Game... - 20th Sep 17
Precious Metals Sector is on Major Buy Signal - 20th Sep 17
US Equities Destined For Negative Returns In The Next 7 Years - 3 Assets To Invest In Instead - 20th Sep 17
Looking For the Next Big Stock? Look at Design - 20th Sep 17
Self Employed? Understanding Business Insurance - 19th Sep 17
Stock Market Bubble Fortunes - 19th Sep 17
USD/CHF – Verification of Breakout or Further Declines? - 19th Sep 17
Blockchain Tech: Don't Say You Didn't Know - 19th Sep 17
The Fed’s 2% Inflation Target Is Pointless - 19th Sep 17
How To Resolve the Korean Conundrum  - 19th Sep 17
A World Doomed to a Never Ending War - 19th Sep 17
What is Backtesting? And Why You Need Backtesting System? - 19th Sep 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

Another Stock Market "Minsky Moment" or Will the Markets Calm Down?

Stock-Markets / Stock Market 2017 May 18, 2017 - 03:06 PM GMT

By: Anthony_Cherniawski

Stock-Markets

Good Morning!

The chart show the best interpretation of yesterday’s decline. The SPX futures declined another 13 points before bouncing early this morning. It has regained about half of the overnight loss. As it stands, this would be an irregular correction, where Wave [c] does not meet the top of Wave [a]. Although unlikely, it is still possible that SPX could bounce back to the 50-day Moving Average at 2369.62.


ZeroHedge reports, “European and Asian stocks slumped on Thursday following the worst one-day drop in US stocks in 8 months, while S&P futures tumbled to session lows, down 0.3% to 2,350 after initially posting a modest rebound, following a new Reuters report alleging that Trump campaign members communication with Russians on at least 18 occasions, and which prompted today's risk off mood sending the USDJPY crashing by 100 pips from overnight highs of 111.40.

As stocks fells, yields dropped to the lowest in a month, while volatility, artificially subdued for the past month, exploded higher. Should vol continue to rise rapidly, there is a threat that vol-neutral and directional systematic funds such as CTAs and risk-parity will be forced to liquidate positions, as explained yesterday.”

VIX futures are higher. Whether they have crossed the Cycle Top resistance at 15.96 is in question.

ZeroHedge observes, “Today's sudden 'Minsky Moment' in markets has pushed US equity risk perceptions to their highest relative to Europe since August 2015, back to old 'norms'.

As Bloomberg notes, U.S. politics are taking center stage as risks recede in Europe following the French presidential election. With Donald Trump facing the deepest crisis of his presidency, the CBOE Volatility Index surged on Wednesday, while Europe’s VStoxx Index rose less than 5 percent.”

Bloomberg reports, “It finally happened.

After months of speculation over when the lull in U.S. equity volatility would snap, investors got their answer Wednesday. A bombshell report on President Donald Trump’s interactions with former FBI director James Comey sent the VIX up the most in almost a year.

For anyone on the wrong end of the trade, it was a painful lesson.

Investors who had been minting money since Election Day by selling volatility, taking a short wager on equity-market turbulence, got a reminder of how fast the bet can turn. Stuck for weeks at its lowest levels in a decade, the CBOE Volatility Index surged by almost half in a matter of hours.”

TNX overshot its Head & Shoulders target and its Cycle Bottom at 21.99 this morning. A breakdown beneath the April low could lead to more selling.

The next Master Cycle low is due next week, so there is little incentive to bounce until the low is in.

Gold may be headed for a turn today as it is a Pivot day. Gold futures appear to have peaked at 1264.75, a 60.7% retracement, early this morning and has been declining since.

Crude appears to be making an “inside” consolidation, neither making a new high nor a new low. As I mentioned yesterday, there is a distinct probability of a marginal new high before Crude resumes its decline.

USD futures are bouncing, but it does not appear to be significant at this time. Of course, there is a possibility of a bounce to the Head & Shoulders neckline, so we may monitor it for any sudden moves.

The next pivot days on my Cycles Model come between May 26 and June 2.

USD/JPY futures appear to have made a new overnight low at 110.24, challenging its mid-Cycle support at 110.36. It has bounced since then, but may be limited by the 50-day Moving average and Cup with Handle trendline, both at 111.62. We may see liquidity being squeezed as long as USD/JPY stays beneath that level.

Regards,

Tony

Our Investment Advisor Registration is on the Web.

We are in the process of updating our website at www.thepracticalinvestor.com to have more information on our services. Log on and click on Advisor Registration to get more details.

If you are a client or wish to become one, please make an appointment to discuss our investment strategies by calling Connie or Tony at (517) 699-1554, ext 10 or 11. Or e-mail us at tpi@thepracticalinve4stor.com .

Anthony M. Cherniawski, President and CIO http://www.thepracticalinvestor.com

As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals.

Disclaimer: The content in this article is written for educational and informational purposes only.  There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

Anthony M. Cherniawski Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife