Rinse...Spin...Repeat...😕

Is anyone else tired of TV experts pundits repeatedly proclaiming spinning that the Fed is going to pivot (pause and reverse rate hikes) earlier, rather than later (as Fed Chairman Powell has repeatedly vowed) ...every time that markets make a new low?

Sheesh! 🤔

This chart could represent 

any period of time this year 

where this rhetoric was repeated...ad nauseam.

P.S. By the way, it seems to me that the UN has gotten "too big for its britches"...which wants to surveil global market traders'/investors' trades and control money flow and prices in world markets. 

So, does this involve penalties, too? 🤔

Source: ZeroHedge

CS & DB: Have You Ever Seen A More Perfect Union Of Banks On The Road To Zero?

The following monthly comparison chart illustrates the lock-step movements of Credit Suisse (CS) and Deutsche Bank (DB) since September 2001. 

Neither one recovered from their lifetime highs set in April 2007...right before the 2008/09 financial crisis.

They're both trading at or near their lifetime lows...just above zero.

No matter what pundits and bank executives say, and notwithstanding the fact that they were on the List of 29 Banks Deemed 'Too Big To Fail' by the G20 Financial Stability Board (published in November 2011), exactly how solvent are these banks, since charts don't lie?

Perhaps they funded one-too-many ESG company, or Bitcoin...the top 100 ESG companies are listed here.

The following monthly chart compares the Swiss Franc (CHF/USD) with the Euro (EUR/USD).

With some minor variations since October 1989, these currencies have traded in similar trajectories, as well. The Euro has experienced much more volatility and wild swings, while swings in the Franc have been tighter and more muted.

We'll see if the divergence of the lower monthly swing high set in the Euro in December 2020, versus the higher swing high of the Franc (leading to the sharp decline of the Euro below parity with the USD and to a lower swing low), will, eventually, drag the Swiss Franc below parity and a new swing low, as well.

Such a scenario [a CHF plunge to a new swing low (below its large sideways trading range) and hold below USD parity] could spell the downfall of Credit Suisse and, potentially, Deutsche Bank.

The following ZeroHedge article offers some insights relative to problems at Credit Suisse.

Source: ZeroHedge

ZeroHedge excerpt

SPX: Q3 Wrap-Up & Outlook For Q4 2022

Further to my posts of September 30 and September 24, the following will summarize SPX market action for the month of September, Q3 and year-to-date.

Please refer to the following three charts...namely, the yearly, quarterly and monthly timeframes for the SPX.

YEARLY TIMEFRAME:

A bearish engulfing candle has formed, so far, this year on the yearly chart, and it has a range of 1,234.49 points...the second largest on record, after the 2020 range. It closed at a new low in 2022 and well below its yearly pivot point of 3996.12.

The SPX:VIX ratio, shown at the bottom of the chart in histogram form, is sitting just above an important major support level of 100.00, and has fallen below both 5 and 20-year MAs...depicting extreme bearishness on this timeframe.

SPX Yearly Chart

QUARTERLY TIMEFRAME:

Note the long upper spike on the Q3 candle, where it faked a bullish reversal, before falling to a new quarterly low close for 2022...and well below its quarterly pivot point of 3831.68.

The SPX:VIX ratio, shown at the bottom of the chart in histogram form, is sitting just above an important major support level of 100.00, and has fallen well below both 5 and 20-quarter MAs (which are about to form another bearish crossover)...depicting extreme bearishness on this timeframe.

SPX Quarterly Chart

MONTHLY TIMEFRAME:

Note the long upper spike on the September candle, where it faked a bullish reversal, before plunging and closing at a new low for 2022...and well below its monthly pivot point of 3763.01.

The SPX:VIX ratio, shown at the bottom of the chart in histogram form, is sitting just above an important major support level of 100.00, and has fallen well below both 5 and 20-monthly MAs (which formed another bearish crossover in April)...depicting extreme bearishness on this timeframe.

SPX Monthly Chart

PIVOT POINTS FOR OCTOBER:

The following Pivot Point Calculator depicts the Pivot Point, 3 Resistance Levels, and 3 Support Levels for the month of October (taken from the data of the September candle)...which are possible upside and downside targets.

Note that the S2 target is in line with the first major support level of 3200, mentioned in my post of September 30, while S3 sits just above the next major support level of 2800, also mentioned therein.

Investing.com Pivot Point Calculator

(via Strawberry Blonde's Market Summary)

CONCLUSIONS:

1. As I mentioned in my post of September 30, until we see the SPX:VIX ratio fall to somewhere around 80.00, or more likely 60.00, I don't think we're close to an equity capitulation, yet.
2. Furthermore, and, as I concluded in my post of September 24, all in all, I see no pivot away from U.S. Dollar strength and global equity and sector (and Bitcoin) weakness...YET.
3. So, for the moment, U.S. cash is king, as the U.S. Fed has signalled its intent to continue raising interest rates and keep them elevated for some time after inflation has declined to the Fed's 2% maximum inflation target...which could last well into 2025.
4. As an aside, my 2021 Market Wrap-Up and 2022 Forecast (written on January 1) has been fairly accurate, to date. By the way, the S2 target for the 2022 timeframe (calculated from the 2021 candle) is close to 3200 (and the Pivot Point from the 2020 candle sits at 3236.04), while the S3 target is close to 2800...both of which are likely targets, either for October, or sometime this year...especially 3200, where there is a confluence of a variety of Pivot Point targets, as well as (first) major price support. Here are several excerpts from that post, as well as my last update therein...

Finally, until President Biden drastically changes course from his 'Big Government Tax & Spend' agenda, and unleashes the oil and gas industry by dropping his overly-restrictive and punitive regulations, trade with caution, as I expect high volatility and large intraday swings to continue!

SPX: A Big-Picture Market Perspective...Still Room For More Rate Hikes and Market Weakness

Check out the following two long-range monthly charts of the S&P 500 Index (SPX).

With the current Federal Reserve Interest Rate still only at 3-3.25%, and the SPX still 395% above its 2009 low, it seems to me that there is still a lot of room for more rate hikes to tame inflation, which may bring price down to around 3200 -- its first major support level -- or even lower.

That would blow off the excess parabolic froth that was created in this market from mid-2020 and bring equities more in line with actual economic and global supply-chain conditions.

Until we see the SPX:VIX ratio fall to somewhere around 80.00 or, more likely, 60.00, I don't think we're close to an equity capitulation yet.

So, look for more rate hikes ahead and more SPX weakness...which is in line with my conclusions in my post of September 24.

P.S. The SPX closed the day, month, Q3 and YTD much lower and just a breath above its low of the day, month, Q3, and YTD...at 3585.62.

British Pound's Breaking Point

* See UPDATE below...

The British Pound (GBP/USD) is taking a beating in overnight trading as it crashed to a new all-time low of 1.0384, so far...below the record low set in early 1985.

Its long-term major support (breaking point) of 1.4000 was broken in April of 2016, and it never recovered.

As I mentioned in my post of September 24, the US Dollar has strengthened this year against all other foreign currencies, including GBP/USD.

Unless GBP/USD retakes and holds above 1.4000, expect more volatile swings and, possibly, a break below parity.

Source: ZeroHedge

* UPDATE Sept. 26...

Will the Bank of England raise rates aggressively before their next scheduled meeting on Thursday, November 3 to stem the rout in the Pound Sterling?...

Source: ZeroHedge

ITALY: Time For A Political Change...But Will That Prop Up Their Major Indices?

Since the financial crisis of 2008/09, Italy's Major Indices have had difficulty gaining sustained traction to accumulate and build on meaningful gains above their respective long-term major support levels (16,000 for the FTSE Italia All Share Index and 1,600 for the Investing.com Italy 40 Index). They've been, essentially, trading in a large and whippy sideways consolidation zone, since then.

So, perhaps a change of political landscape will ameliorate that, in due course.

We'll see how the final votes tally up in today's election -- potentially in favour of Italy's first female Prime Minister -- to swing the left-leaning government to a right-leaning one.

Until party leadership and party direction/agenda become known and more detailed, we may see some volatile trading in these markets (as well as the Euro, as noted in my post of September 24) for awhile.

 

Source: ZeroHedge

CHART OF THE YEAR: We(Didn't)Work 😕

WeWork (WE) is on its way to zero...who bought it at 14.97?🤔

SoftBank (SFTBY) invested $17 Billion in WeWork, according to this October 2021 Bloomberg article...and we know how SoftBank has fared. 

Since my post of August 8, SFTBY closed lower at 17.95 last Friday. As I reported, failure to hold above 16.00 could see it plummet in short order to 10.00, or lower.

GLOBAL MONEY FLOW: Cash & Crash

I've written a number of posts in the last few months regarding the MSCI World Index and the SPX, several of which are here and here, respectively, (together with subsequent updates) warning of further market crashes.

The following Year-to-Date and One-Week Percentages Lost/Gained graphs clearly depict, at a glance, global money flow for 2022 and for the past week (graphs courtesy of StockCharts.com).

MONEY FLOW YEAR-TO-DATE

U.S. Major Indices

U.S. Major Sectors

European Major Indices

Canada, Japan & Australia Major Indices

Emerging Markets ETF, BRIC Major Indices & BRIC ETF

Commodity & Agriculture ETFs & Commodities

Currencies, BITCOIN, XLF, EUFN & GXC

MONEY FLOW SEPT. 19-23

U.S. Major Indices

U.S. Major Sectors

European Major Indices

Canada, Japan & Australia Major Indices

Emerging Markets ETF, BRIC Major Indices & BRIC ETF

Commodity & Agriculture ETFs & Commodities

Currencies, Bitcoin, XLF, EUFN & GXC

SUMMARY

Overall, the biggest winners have been:

• the Oil and Gasoline sectors, 
• as well as the U.S. Dollar.

The biggest losers have been:

• Bitcoin, 
• global equities (especially U.S., China, Russia, Europe and the emerging markets ETF, EEM), 
• global Financial ETFs (U.S., Europe & China), 
• foreign currencies, 
• U.S. Bonds, 
• copper & precious metals, and
• U.S. Discretionary, Technology, Materials and Financial Sectors.

During the past week, there has been:

• continued buying of the U.S. Dollar, 
• continued selling of Bitcoin, 
• some selling in Oil and Gasoline,
• accelerated selling of the British Pound, the Euro, Aussie Dollar and Canadian Dollar,
• accelerated selling of the U.S., European and Chinese Financial ETFs (XLF, EUFN and GXC), and
• accelerated selling of global Major Indices (including U.S.), and U.S. Major Sectors.

CONCLUSIONS

All in all, I see no pivot away from U.S. Dollar strength and global equity and sector (and Bitcoin) weakness...YET.

So, for the moment, U.S. cash is king, as the U.S. Fed has signalled its intent to continue raising interest rates and keep them elevated for some time after inflation has declined to the Fed's 2% maximum inflation target...which could last well into 2025.

*********

P.S. After I published this post, I came across the following article...which, interestingly, confirms my conclusions...

Source: Bloomberg

And, more analysts' opinions...

Source: Barron's

BYND: Don't Mess With Vegetarians! 😕

* See UPDATE below...

After a face-ripping spike to its all time high of 239.71 three months after its IPO in May of 2019, Beyond Meat Inc. (BYND) has done an about-face ever since...falling well below its IPO price of 46.00 to 16.45 (as I write this early Tuesday afternoon), as shown on the following monthly chart...and around a 90% drop from its high.

It looks like people still like real meat...instead of plant-based meat...even during the current period of 40-year high inflation. 

Until that changes, we may see price eventually reach zero.

And, from the following report, it looks like it's not just its price that's been a face-ripper.

I don't imagine this recent incident involving their COO will help their sales very much. 😕

Source: ZeroHedge

* UPDATE Sept. 26...

It turns out that fake meat is too expensive and unappetizing for 95% of the population...the meat-eaters.

Sounds like this fad was a dud...and a liability for its investors.

Source: ZeroHedge