Tues, Feb 16, 16
08:45 ET Update: [Stockboardasset] S&P futures +200bps
08:45 ET Update: [Stockboardasset] Nikkei +293bps
08:45 ET Update: [Stockboardasset]FTSE100 +62bps DAX -65bps
Global equities remain in a sustained rout as global economies are fighting a commodity, currency, and interest rate war. Front and center is OPEC announcing a production freeze with its major producers. Rumors over the past week were calling for production cuts, which spiked WTI from the 26 to 31 handle. WTI is stabilizing as schizophrenic Goldman Sachs revises their WTI to not much downside is left. US Equities revive their high correlation to WTI .925 on a 300min scale. Unprecedented geopolitics are unfolding as the Turkish Military is shelling into Syria. The Saudi’s are conducting the largest military drill in the Middle East called North Thunder involving more than 20 countries. How timely, the Middle East nations are standing behind Saudi Arabia as the Russian’s and Assad run a much in Syria advancing the most in the multi year conflict.
A far quieter session in the EU has Draghai supports a dovish tone of caution and continues to buy bad debt in Eurozone banks. Positive tones are seen in EU Equities as Draghai will act if market turmoil continues.
Japan data had the JPN225 advance, as well as increased talk of further easing into the early session of EU. China new loans data had a huge jump to 2004 levels. Chinese stocks advanced lock step with Japan.
Global Equities Correlation Coefficient (Daily)
(ALERT-> Dramatic INCREASE in correlation from prior session.)
- CL .93
SPX500 Correlation Coefficient (300min)
- CL .92
- USDJPY .96
- HKG33 .68
- JPN225 .91
- DX .94
- GC .-.68
USDJPY Unfair low 111. .236-.382 box Fib draw from unfair low to NIRP high. 114HVN support as a downside imbalance would be 112.50 or upside imbalance 114.50
EURUSD Breakout continues. USD inverse. CADUSD Buying on OPEC rumors+ Freeze AUDUSD Buying on Stimulus talk in Asia
US ECON DATA Release
9:00 AM ET
10:30 AM ET
7:30 PM ET
FOMC Minutes Feb 17, then James Bullard Speaks 6pm.
Probability of March Rate Hike has been lowered as FED reconizes global market turmoil.
1.272 extension of SPY entire bull cycle was rejected as OPEC comments broke the wires last week. Price rotates the lower distribution of the bi modal 189.50 POC. US Equities are highly correlated with WTI. WTI is +21% from 26 handle as market spec was expecting production cuts by OPEC, but rather breaking this morning a production freeze. Disappointment this morning in OPEC response sent WTI from the 31 handle to 30 handle. Also, lets not discount the geopolitical events in Syria and Turkey unfolding. Market is upside imbalance +131bps from prior session point of control. Premarket a window is open and the chance for an open rejection test filling the window is likely. Major point of control of the lower distribution is 189.50
- Tail Risk outliers today- 182 (1.272ext) & 194.50 HVN
- Downside Risk 188.42, 187.42, 186.93, 186.42
- Upside Risk 189.50, 191.54,
- We are leaning towards an open rejection test has a morning gap to the downside to backfill. 189.50 major point of control which sellers could be triggered. US Equities are highly correlated with WTI.