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Market Note

Don't Fight the Fed

Jun 23, 2019

Good Afternoon:

Markets should pause and digest last week's all-asset, Fed-induced rally; however, we have another binary-week with focus turning to the G20 Meeting and a host of key Economic Releases and Fedspeak.

Surprisingly, the SP500 Weekly Option Implied move is slightly higher than last week, coming in at + / - 45 points. The upper edge is 2995.55 and the lower edge is 2905.37, with the bias-setting weekly magnet at 2936.25.

Trends are solidly up, but at these extremes and the divergence between Financials and Bonds, coupled with the potential disappointing news from the G20, attention will look for clues from the term structure of volatility and demand for VIX outright via Volatility of VIX (VVIX).

Updated Levels.

Market Notes will resume late next month.

All the best,

Scott

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