As if Thursday couldn’t get any lamer……….
Last night, the ES and NQ both tumbled double digits (see yellow tint below) thanks to a brief case of the Hong Kong flu. It looked like it actually might be the first decent down day since President Benjamin Harris was in office. However, as federal law requires, this modest drop was totally destroyed (and then some) as highlighted by the green tint.
Now, on Thursday evening, the Senate passed a $4 trillion budget resolution for 2018 (by a single vote), which has aroused algos everywhere into believing that massive tax reform is going to be a reality (cough cough health care repeal failure cough cough) and that these cuts will make equities much more valuable than their already sky-high prices. The result above (magenta tint) was instantaneous.
The longer-term picture on the ES remains the same, as the daily chart below shows: a resolute march higher, day after day, with recent weeks having virtually no volatility whatever.
Of course, if there was any symmetry in this market, these overnight gains for the bulls would be laid waste by Friday’s close, just as Thursday’s drop was eliminated by the terminus of the 10/19 day session. However, something tells me that it isn’t going to work out quite that way.