Market Whiplashed

I hope I’m not annoying anyone with these posts, but it’s reality of the market- 6 whiplashes in the last 24 hours, and four in the last 3 hours.

Shortly after the report that the Trump administration is considering of a temporary trade deal, which would presumably help Trump’s chances in the 2020 election, but barely moved stocks, the story has been shot down. The entire morning has been one whiplash after another, the kind of scenario (a chaotic market being whipped around by wild rumors) that’s responsible for the broadening top that’s been forming in the S&P since January 2018. Nothing new, the micro reflecting the macro. Markets are fractal.

Here’s the score card this morning. On the ECB….

EUR/USD (1m) market celebrate ECB easing, then says it’s not enough.

On the trade war…

USD/CNH (1m) market celebrates temporary trade deal hopes, then erases them.

And from S&P futures’ perspective…

ES/S&P futures (1m) ramps up nearly 1% on Trump tweet last night, retraces most of it ahead of the ECB, then knee jerks up on a dovish ECB, then knee jerks down on an ECB not dovish enough, knee jerks up on trade deal hopes, knee jerks down as hopes dashed. That’s not even 24 hours.

The theme in S&P futures is still lack on confirmation and negatively divergent. I’ll update the charts as soon as the market figures out what it thinks. Here’s SPY’s 1 min. cash chart since the 3rd of September.

SPY (1m)