Dow Bulls Have Another Chance, Dollar Needs a New Foothold to Keep Climbing
Dow Jones Industrial Average, Meme Stocks, VIX, Dollar, Fed Funds Rates and USDJPY Talking Points:
The Market Perspective: EURUSD Bearish Below 108, Dow Range Between 34,200 and 33,200Fed Chairman Powell’s remarks were closely watched by the market, but market rate forecasts had already closed the gap to the central bank forecast before he spokeWith US rate expectations finding balance and the next 24 hours’ docket light, the greatest potential for a strong move is a surprise headlines or a more rudimentary ‘risk’ development
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The market’s alertness to rough seas in risks trends was high this past session between some signs of instability in once-favorite meme stocks and anticipation around Fed Chairman Jerome Powell’s scheduled Q&A in the early afternoon hours in Washington. Ultimately, the benchmark risk assets earned a measure of recovery, which would prompt some to interpret genuine enthusiasm. I consider the developments this past session more ‘relief’ to the preceding 72-hour risk reversal. The difference is that that a motivated turn could draw more drive to translate a technical event into a meaningful trend development, while a rebalance is a finite influence that will need a fresh wind to develop traction on significant market developments like major breaks or trends. With the economic docket over the next session – and generally through the end of the week – light of singularly-influential events, the onus for earning a significant progression will be set substantially higher.
Looking at the various outlets for flare ups in ‘risk trends’ that can turn into full-blown fires, a few developments to start the week with outsized potential were snuffed out. In particular, the heightened volatility of key meme stocks was on my radar. A side effect of the creeping recovery in the more speculative of venues, the charge Monday in…