The madness of the ECB

US equity indexes closed broadly lower, sp -22pts (0.8%) at 2748. Nasdaq comp' -1.1%. The two leaders - Trans/R2K, settled -1.0% and -0.9% respectively.

sp'daily5

VIX'daily3

Summary

US equities opened moderately lower, and it was enough to break the Monday low of sp'2767. With that break, prices cooled into late morning. There was a bounce, but it failed to hold, with a new intraday low of 2739 in the closing hour.

Volatility picked up for a fourth consecutive day, with the VIX settling in the mid 16s.


The madness of the ECB

The ECB announced that rates will be held at -0.4% until at least end 2019, rather than just this summer. TLTRO 3 is set to begin in September, but that will do nothing of any significance to stop the broader European economy from falling into recession.

The Euro had a rough day. In late afternoon, the Euro/USD printed 1.1176, the lowest level since June 2017.

XEU, monthly

Even the mainstream cheerleaders are starting to wonder if the Jan'2017 low of 1.0341 will be tested.
The dollar doomers still refuse to acknowledge that the USD remains king of FIAT land. There is ZERO reason to believe that will be changing any time soon.

Ohh, and as for Draghi - the CEO of the EU branch of Print Central, I'm sure he is itching to quietly exit his job this year. He can't possibly not realise the endgame isn't far off now.

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Ten years from six six six

US equity indexes closed broadly weak, sp -18pts (0.6%) at 2771. Nasdaq comp' -0.9%. Dow -0.5%. The two leaders - Trans/R2K, settled -0.5% and -2.0% respectively.

sp'daily5

VIX'daily3

Summary

US equities opened in minor chop mode, and saw choppy weakness into mid afternoon. The 2pm hour saw a micro bounce, partly on the excuse of the fed beige book. However, the closing hour broke a new intraday low, settling just above the key Monday intra low of 2767.

Volatility picked up, with the VIX settling +6.8% at 15.74. A push to the key 20 threshold looks a given.


Ten years from six six six

sp'monthly

March 6th 2009 saw an intraday low of 666.79... and the rest is history.

A little flashback, back when 360p resolution was considered bearable, and we were all somewhat younger...



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Tuesday tedium

US equity indexes closed a little weak, sp -3pts (0.1% at 2789. The two leaders - Trans/R2K, settled -0.8% and -0.5% respectively.

sp'daily5

VIX'daily3

Summary

US equities opened with minor chop, saw a cooling wave to 2782, but that was all the bears could muster. There was a rather standard rebound, with indexes turning fractionally positive. The afternoon saw minor chop, with a micro drop into the close, as the bulls can't manage any daily closes >2800.

Volatility itself was very subdued, with VIX printing 15.39, but then melting back into the upper 14s. The Monday morning low of 13.38 - with sp'2816, are key floors/ceilings, at least for this week.


Meanwhile...

Seriously though, the sad truth is that most (not least the cheerleaders on clown finance TV) would prefer the US govt', along with the Federal reserve, to make illegal any 'price discovery'.

The end of QT is going to occur later this year, a date might even be announced as early as the March 20th FOMC. From there, its just a case of when QE4 is initiated. Arguably, we'd need to see a very significant multi-month equity down wave for the Fed to have a valid excuse.

Having already bought Govt T-bonds and Mortgage backed securities, next on the shopping cart menu are corporate bonds, and then ETFs/stocks. Whilst the latter might sound like crazy talk, the truth is that the Japanese, Swiss, and a number of other central banks have already progressed to that stage of insanity. The endgame isn't far off now.

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