E Market Briefing For Monday, June 15

A 'tug-o-war' dominated Friday's action; which indeed had the two 'fades' we suspected likely; with traders nevertheless managing to hold S&P together into the Close; resulting in approximately a one-third (at the best) recovery of a prior more notable decline; with internals topping days ago; which is why the Volatility Index (VIX) was not declining, even as the S&P was still advancing.

 

 

Technically... re-calibrating how deep the market goes with pullback behavior is also quite variable, and not solely because of 'raw' economic measures, even as of course consumer 'reticence' to engage in social and commercial activities will continue exerting pressure on earnings; to the extent that even matters for now.

Executive summary:

  • The world of worry isn't calmed by Friday's alternating rebound; it's just the normal bounce off the first high-level support; and they may try extending it, because failure to hold it would reinforce ideas of stair-step declines;
  • Debt-laden issues can indeed suggest more trouble brewing; and the softer Dollar alludes to this indirectly; as did the 'let's go Japanese' monetary policy affirmation by Fed Chairman Powell (refers to perpetual low interest rates);
  • Notably (when viewing globally) EEM (Emerging Markets) rebounded to soft underbellies of the old rising-trend pattern; which is of concern to what had been (and ideally can be in the future) a global snap-back or basing time;
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  • Meanwhile the market's 'reset' could be healthy and set-the-stage for more upside; as the angle-of-attack we were seeing exhausted a few weeks back and that's why the so-called illiquid plunge of Thursday is attributed to that;
  • I point out (as I did early this year) that whether up or down; it's not liquidity as much as it is monkey-see/monkey-do; as aglo-traders (especially) tend to move in lockstep in either direction;
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