The monthly retail report came out, and it was exceptionally weak at one-third of projection.
My view of retail is, as you might expect, fairly cynical. An enormous portion of this country lives paycheck to paycheck in, as the saying goes, quiet desperation. Because they are saturated by advertisements constantly about how this-or-that product will make their lives better, they plunge ceaselessly deeper into debt to acquire stuff they don’t need with money they don’t have.
The relief is ephemeral, and they go back into the same cycle. All the while, the principal beneficiary of this entire circus is just one man with an unending midlife crisis, paired with the most vapid and venal harpy on the planet.
:max_bytes(150000):strip_icc():focal(719x19:721x21)/Jeff-Bezos-and-girlfriend-Lauren-Sanchez-mallorca-spain-051723-1724c12cf52b459187be6eacce031526.jpg)
But I digress! The more important news is that the /ES and /NQ are both down (about half a percent and a full percent, respectively) and we can see that the entirety of this week has been a disappointment for the bulls. Indeed, the mega-rally from last week reached peak climax on Monday morning, and reality has been slowly creeping back into people’s heads ever since.
The VIX threatened to go sub-teens, since the giddiness from last week had people convinced there would never, ever be troubles again of any kind, and that the U.S. was in an absolutely peachy position for a prosperous future. As I’ve pointed out, we’ve spent months banging around between about 14 and 24 on the VIX, and we actually got beneath those levels yesterday. I am confident we’ll ascend in short order.
On a daily basis (as opposed to the minute bars above) the key question in the days ahead is the zone I’ve tinted on the S&P 500 cash market. That represents the post-election gap as well as medium-term support via trendline. Crack it, and the narrative will change rapidly.
Some kind of medium-sized selloff between now and the end of the year would make a certain amount of sense, because no political party owns this market anymore. Biden is beyond a lame duck, with his entire party in shambles, and the forthcoming administration only has to start to take credit (or, most likely, lay blame) after they are sworn in.
Thus, the market has no champion who needs to crank out fake numbers or doe-eyed speeches, and if an actual organic market is allowed to exist for even a few weeks, I suspect you’re going to see some hard selling at some point.
