Business

US equity markets have given up most of their early gains... Trannies and Nasdaq are holding gains

...as financials fade...

As the big banks roll over hard..

One month ago, China came "this close" to the one event which terrifies Beijing more than anything: a run on China's shadow banks.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

When we were discussing the self-reinforcing dynamics of vol-neutral funds yesterday, which may or may not continue selling today depending on what the VIX does, we concluded that aside from the decision-making mechanics of systematic funds, the biggest question would be if the Fed, or other central banks, do not do step in to prop up the market as they have on every other similar occasion in the past 8 years.

Would that imply that traders - be they CTAs, risk-parity, or simply carbon-based - are finally on their own?

With 'soft' data broadly tumbling to catch down to 'hard' data's demise, today's Philly Fed exuberance stands out like badly-adjusted sore thumb. Beating expectations by 6 standard deviations (38.8 vs 18.5 exp),

the breakdown shows employment dropped, new orders dropped, prices paid dropped, but shipments surged.

Looking at the full breakdown of the Philly sentiment print, most of the component and especially future indicators fell. For example, the 6m outlook fell to 34.8 from 45.4 previously...