Market Overview
Another chaotic day in the markets with narratives changing by the minute. Yet again the KOSPI got smashed overnight and then economic data came in hot for the second time this week. This market is very hard to trade at the moment - we almost have news and event overflow and quite honestly I am surprised that the VIX hasn’t responded more. Mid terms coming up, hot inflation data, war with Iran escalating with regional neighbors getting hit, Ukraine still an issue with Russian energy assets being targeted and oil moving up. It’s not good and risk assets are getting rinsed as a result.
The SPY is now on 2 consecutive closes below the 21 EMA, and today’s session tested as low as 764.44 before bouncing to 770.46 - almost dead on the 21 EMA at 770.77. That’s a razor-thin potential close so far and not a convincing reclaim. The 8 EMA is above at 773.35 and price is still underneath it, so the short-term stack is technically broken. VIX at 16.9 isn’t screaming panic, but we need a clean close back above both the 21 EMA and the 8 EMA to get bullish again. Watch tomorrow’s open closely - another close below 770 keeps the bears in control.
