Two key scenarios to consider as uncertainty lingers

The chart in this report is only accessible to members
The chart in this report is only accessible to members
The chart in this report is only accessible to members

The recent rollercoaster in Equity prices looks to be a negative given all the uncertainty in early November ahead of this week’s CPI.  I had argued that prices might start to stall out and turn back lower, and I don’t think Tuesday’s minor bounce relieves fears of that happening.  Four key negatives are still in place:  First, Technology remains quite weak and has not sufficiently stabilized. Second, implied volatility looks quite cheap compared to the recent Cross-asset volatility.  Third, Treasury yields remain stubbornly high and have not yet rolled over.  Fourth, short-term cycles show a minor peak in place this week and possible weakness into 11/22.  Overall, until SPX 3912 is exceeded, my thinking is that there stands a better chance of SPX pulling back in the weeks ahead.  3700 is a very important spot and breaks of that would lead down to challenge and undercut October lows.  Thus, strength is required immediately.

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Two Key scenarios to consider over the next week

1. Equities start to turn down by end of week with possible catalysts of a contentious election without an immediate clear result, or a possible failure of CPI to retract immediately. This would go hand in hand with rec...
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