VXX

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GDX

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The Bounce, Some Perspective

“The S&P 500 index rallied 107 points or 5.7% in 24 hours — from the 1880 low on Wednesday at 12:45 ET to Thursday at 12:45 ET. An afternoon tumble rescinded 334 points of the DJIA’s 381 point-rally after ex-Philly Fed President Plosser stated on CNBC: “”Unless something extraordinary happens, QE4 is not in the cards.” … The usual late SPU manipulation not only helped stocks recovery after Plosser’s QE comment, it generated a 29-handle S&P 500 rally. This is the largest last-hour ramp (1.5%) that we can recall.”

— Bill King, The King Report

 

Major Bottom In Crude?

uso

Crude oil(USO)is surging again today.  The USO is up over 5% as it adds to yesterday’s powerful breakout move.  On Thursday crude took out the upper trendline of a bearish channel that had been in place since the July peak.  The USO closed yesterday with a 9.25% gain on its second heaviest upside trade of 2015.  We now believe that crude may have put in a major bottom this week.  The next big challenge for the USO will be the March/July lows near $15.55.   A pullback from this area would provide a low risk buying opportunity.   

 

Retail Investors Revolt

CreditSuisseRetailExodus

From Credit Suisse:   We observe that the latest weekly estimates from the ICI indicate these retail investment outflows began gaining strength in Q3 2015. Data to date suggest that we will see the first example of back-to-back monthly outflows from both equity and bond mutual funds (in July and August 2015) since Q4 2008.

More from Bloomberg:  Anytime you see something that hasn’t happened since the last quarter of 2008, it’s worth noting,” Saporta said in a phone interview. “It may be that this is an interesting oddity but if we continue to see this it could reflect a more broad-based nervousness on the part of household investors.

Read the whole thing:  http://www.zerohedge.com/news/2015-08-28/investor-revolt-arrives-hasnt-happened-q4-2008

 

 

 

Dow Jones Industrials Have Recovered All Of Monday’s Loses

indu

The Dow is now 1,200 points above the panic low set early Monday.  The index is now trading above Friday’s low.  The deeply oversold condition reached earlier this week set the stage for an incredibly powerful rebound.  The key question is will this rally hold.  If stocks put in the greatest spike low of all time back on Monday, an event we believe is certainly possible, there is a great deal more upside ahead.  At current levels the Dow is trading right in the middle of its August range.  Not many folks expected this during the first 30 minutes of Monday’s action. 

DXD

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Q2 GDP Revision Soars To 3.7% As Inventory Build Hits Record

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Key bit from Zerohedge.com:  Well, if the Fed is truly data-dependent, September is now squarely back on the table following the first revision of (double seasonally-adjusted) Q2 GDP data which soared from 2.3% to a whopping 3.7%, blowing out the Wall Street consensus estimate of 3.2%, and printing above the highest Wall Street forecast (the 3.6% from JPM).

inventory build up_0

But the real reason for the surge is shown in the chart above: from an inventory build of $124 in the first GDP estimate, the BEA now sees a total of $136.2 billion in inventory build in Q2. This is an all time record, and a number which suggests the upcoming inventory liquidation will be truly epic, not to mention recessionary.

 

 

 

SPX

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VXX (Volatility Ultra)

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