MACRO MORNING NOTE June 16, 2017
SPX Flat, DXY Down, WTI Up
SBA’s Alastair Williamson concludes the Macro Morning Note from Baltimore, Maryland.
Welcome to quad-witching OP/EX Friday. In JPM’s Kolanovic latest note he says, “$1.3 Trillion In S&P 500 Options Expire On Quad-Friday”. Regional stock indexes in Europe are slightly higher including CAC40, DAX and the UK100. Over in China, regional stock indexes are mixed with SHCOMP -30bps and HKG33 +33bps. Overnight, the key event was the BOJ, which maintained it’s current stimulus of over accommodative. The Yen continues to drop with the USD/JPY on a multi-session ramp adding liquidity to global markets. The US reflation trade via the Dollar remains mixed in the low 97 handle along with UST10Y 2.172. For the most part, global markets are ignoring the tech sector losses in the United States for the second week. Last Friday tech meltdown was a wake up call as the higher timeframes started selling with liquidity evaporating. Looking forward, housing starts and building permits will release at 8:30 am est. followed by labor market conditions and consumer sentiment at 10 am est.
The most concerning chart that keeps us up at night is the flattening of yield curves, along with the commodity and dollar collapse.
US Retail verse US Consumer Staples Ratio
Stocks verse Bonds Ratio
Weakness in Risky Parity
Compression in the <USHL5> US New high/low 5 day total usually leads to major imbalance
Inflation or Deflation Indicator
US stocks ignoring China stocks again.. .
CPCE Put/Call Ratio advances
Global credit impulse deepens into negative territory will lead to lower commodity prices and slower economic growth.
US Import & Export Prices Tumble In May As China Credit Impulse Collapses
Trump-Train Stalls As US Manufacturing Output Tumbles In May
Nasdaq VIX verse SPX VIX
US Dollar monthly/weekly pivot 99.26 unlocking overhead with downside projection to S1 94.78. On a weekly compression in bracket is setting up for major direction.
UST10Y monthly/weekly pivot 2.13 reversion has completed. Need more confirmation for next projection use pivot 2.13 as directional guide.
WTI monthly/weekly pivot 44.81 reversion completed. Overall structure is top heavy indicating P-Shape distribution on Y-Axis is unlocking. Overseers of this wave function need to engineer an event or face the next leg down, which would be terrifying, because support is lackluster.
CRB Index monthly/weekly pivot 181 unlocking overhead with downside projection S1 165.
SPX500 monthly/weekly R2 2398 still waiting for more confirmation of reverse polarity. Using R2 2398 as directional imbalance guide.