SPX futures consolidated above 7700.00 this morning, confirming yesterday’s breakout after the dip. It may be on a renewed buy signal that may take effect after a back-test of support (Jackson Hole). Should it break down beneath 7700.00, however, we may see a further decline to the 52-day Moving average near 7561.00 before a final rally.
ZeroHedge reports, “US stock futures are flat and rates rise ahead of today’s main event: Fed chief Kevin Warsh’s Jackson Hole speech at 10am ET (full preview here) as traders seek clarity on his economic outlook and his strategy for lowering inflation back to the Fed’s 2% target.”
The premarket VIX is consolidating beneath the trendline, suggesting a further drop to the bottom of the trading channel near 14.00. VIX is very calm, suggesting a bounce may be forthcoming.
The US 10-year Bond Yield was stopped at the neckline this morning. The Cycles Model suggests the decline may continue to the 52-day Moving average at 45.94 over the next week or so.
ZeroHedge observes, “A stellar 2Y auction, a subpart 5Y, and it only makes sense that we end the week with a perfectly average sale of $44BN in 7Y bonds.”
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