Continuation of Equities Sell Off
NQ futures hit 10900 and LuLu on our radar again
We sent out an earlier subscriber only post this afternoon highlighting the NQ futures once again hit the 10900 region and have bounced. We know how important this level is and two things can happen tomorrow. We can bounce and run back up to 11550 or the powers that control can run stops below 10900 or we just don’t do much and waffle in a range. In either of the cases we know what defines our range and Magnelibra would suspect odds of a bounce to odds of a taking out of 10900 at about 60/40. We always err on the QE side of caution buying things up, that’s why. Anyway here is the chart:
We don’t suppose Amazon is helping the NQ at all considering it has now fallen some 15.8% from its highs:
We also would like to point out one simple and eye opening fact about the Russell 2k, it basically has gone nowhere in 3 years:
If the real economy was on firm footing and QE was filtering down to the general economy, this chart would not look like this. This is one of those tells at the table that QE’s only function is to concentrate wealth in a very few hands, both on the individual level and the corporate level. We should see organic growth filter into higher overall value growth, but we have not, instead we see struggle and a failure to rise even after some $20 Trillion in total global Central Bank balance sheet levels.
We don’t want to pick on Lululemon anymore than we do, but it just keeps popping up on our radar, anyway since we highlighted the frothy $386 level a few weeks ago, this thing has gone south ever since down a bear territory 25%:
So with the equities getting hit hard lately, the bonds haven’t really exploded, they have taken this all in stride and for the most part, a seemingly lackluster trade. However the US Curve flattened a bit today:
We like the longer end here, especially if the equities continue to see rallies get sold into. This is a tough trade to fathom as its been like a decade since we have had any real change in bull sentiment and each and every time a sell off is imminent the FED steps in or some miracle announcement comes about or some corp decides to run some buyback, whatever it takes to keep the Bull running.
Anyway lets’s look at today’s settles:
Nice rally in the energies today except for Nat Gas of course and the FX exposed the dollar weakness again and you can also see how the Russell2k held its own in a large down day for the NQ down a chunky 179.75 points.
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-Magnelibra Econemotions
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