Thread: Bear Cave 2 (Bull Allowed)

Bull and Bear:

https://themarketear.com/

Hmmm....
https://themarketear.com/

SPX daily: We shall see how this rejection plays out the rest of the week!

https://twitter.com/SevenSentinels?r...Ctwgr%5Eauthor
SevenSentinels
@SevenSentinels

1h
June 8, 2021, 8:20 PM

SPX Rejection At The High

Will June 10th be the inflation shocker day, or will it just be a whimper?
Part of the poetry of inflation is that very few understand where it comes from and even fewer are good are forecasting it. Ahead of tomorrow's big print TME has listed a random selection of "the good, the bad and the ugly" latest data points on this what Buffet calls a "gigantic corporate tapeworm". Let's start with the bad news.

June 10th - the potential inflation shocker day
Nordea's macro team continues to be vocal about inflation printing higher. They see risks of a big surprise to the upside for June 10 (May report) with core inflation around 4%, way above early consensus at 3.4%

Meanwhile, the market is still in transitory mode, but for how long?

Nordea's main points to consider;

"2, Clear risks of core inflation >4% in May or June already

2, Headline inflation above 6%?

3, Watch used cars and rent of shelter components in the May report

4, Markets still find inflation mostly transitory"

The used cars "squeeze" continues to be huge. Second chart showing various scenarios assuming 50% up in used cars adding different scenarios to rent of shelter.

GS latest on inflation isn't as "bullish "as Nordea's macro team is. GS writes;

"In the US, our economists forecast a peak core CPI of 3.6% yoy in June, followed by 3.5% at end-2021 and an average of 2.7% in 2022. Their core PCE inflation forecast remains at 2.8% in April/May, followed by 2.3% at end-2021 and an average of 2% in 2022"

The investment bank also notes that inflation is good up to a certain point, so Nordea's take should be considered.

A sudden surge Nordea is describing is not currently "priced" by the market. Given the latest equity vol implosion, our long VIX logic from last week stays intact when we outlined the following;

"As we outlined earlier today, VXHYG reversed two days ago already, and the little late gap vs VIX should come in as the natural low for VIX here."

...but chasing it at 19 now looks a little rich for the short term
https://themarketear.com/

Inflation? No Worries says David Rosenberg - Maybe no worries for some, but prices continue to increase.



David Rosenberg Retweeted
Jay Taylor
@JayTaylorMedia

https://twitter.com/EconguyRosie?lang=en
Jun 3
A growing number of investors and financial pundits are suggesting the Fed may be wrong in suggesting inflation transitory. But David Rosenberg agrees with J Powell and provides some good arguments here


https://www.youtube.com/watch?v=-yGlI22Z3Zk&t=4s


Mohamed A. El-Erian
@elerianm
·
40m
The avalanche continues this morning with a
@DeutscheBank

A report that is getting some attention on #WallStreet
Economists there warn that the Fed's policy stance and framework risk a "time bomb" that "could create a significant recession and set off a chain of financial distress"

https://twitter.com/elerianm

LOL..... Buy and hold love it!

Sven Henrich
@NorthmanTrader

1h
“The Fed itself is increasing the pressure on the system by continuing to buy $120 billion a month of Treasuries and mortgage-backed securities to push down long-term interest rates.”
https://twitter.com/NorthmanTrader

IWM monthly: As we head to a new all time high - IWM has the Highest RSI and the Lowest $CPCE in 20 years on the monthly chart. LOL.... not that anyone cares....

Bottom Line the trend remains up.... Oh Boy! Ride the wave....

Very stretched above the 50 mma (month moving average) I will post a five year chart below.

IWM monthly: A closer look....

Jesse Felder
@jessefelder

1h
NEW POST: Markets Have Bought The Fed’s ‘Transitory’ Narrative Hook, Line And Sinker

https://twitter.com/jessefelder


Markets Have Bought The Fed’s ‘Transitory’ Narrative Hook, Line And Sinker

jessefelder
June 9, 2021
https://thefelderreport.com/2021/06/...ne-and-sinker/

VVIX telling us something?
VVIX continues to refuse "buying" any of the most recent VIX implosion. Note the sharp move higher in VVIX.

We are adding the gap between VVIX and VIX to our risk radar of important "stuff" to watch closely going forward.

Earlier this week we asked ourselves rhetorically;

"The question is if we are reaching the "natural floor" in protection?

Volatility is mean reverting, and thus has a "natural floor". Note that VIX has basically held lows around these levels since April.

Credit protection, CDX IG, has also managed holding this "floor" levels pretty much this entire year.

Markets still lack big new macro narratives, but that will soon change..."

VIX downside is limited from here, while there is a lot of upside potential...
https://themarketear.com/

VIX daily: My tracking data..... Currently testing the April lows.....

$CPCE daily: ( Options Equity Put/Call Ratio) In the past a move to around 34ish has resulted in a spike and some ST weakness for stocks in the days ahead. We shall see if it's different this time. Keep in mind.... "ST" weakness, not a trend change.