take the win

Market vibes

March 11…)

“You got this.” Colloquial American reassurance. Origin probably the 1990s.

JOLTS at 10:00 and the WASDE ag report at noon.

Very little else in the news today, Trump stuff, Citi downgrades stocks, *UNITED SAYS IT'S SEEN 50% DROP IN GOVERNMENT, RELATED TRAVEL (ht Alex), soft if not recessionary themes.

In the markets this morning

The technical highlight from yesterday’s trading is a vertical surge in NDX open interest (chart below). Throughout this correction, which has been both vertical and grueling, open interest has not liquidated.

Longs have gotten out, but even more new longs have gotten in, and it’s likely the new longs have strong location. Strong shorts may have covered, and new shorts may now be located in a position of weakness.

I am not calling the low of the move, but I am keenly aware of a divergence in flows. Equity futures open interest has not liquidated, and it should have. Or, better said, if it has liquidated internally and grown while doing it, the weak sides may have been replaced with inverted location. This is a point of technical development. It could mean an even bigger move is coming… but not yet.

Same idea in S&Ps. I’d stay off the right hand side until we get more technical clarity. Persistent high volume indicates open interest is volatile. At any rate, the trend is so extended at these prices, new short positions would concede the riskiest possible location. If I were coaching a team, I’d say, “Take the win.”

Gold, oil, bonds, and bitcoin up next. And an interesting shot at 50 % correction. here we go.