Something Has To Give

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Market On Open, Thursday 12 March

by Alex King, CEO, Cestrian Capital Research, Inc.

So, these lines cannot all keep doing what they are doing.

Oil and the Vix in lockstep, that can continue. But if it does, then the SPX will fall, because oil is in everything, and oh by the way if you can’t get oil to where it needs to be then you can’t get inert gases to where they need to be either, and if you don’t have inert gases you don’t have iPhones or toasters or servers, so earnings down SPX down.

If the SPX moves up it can only be because (i) a short-covering rally arises out of de-escalation and/or (ii) a real rally, with actual momentum, develops out of the same. If this happens the Vix will be dropping and oil will have led the way down.

So get ready. Because whatever happens next, this weird stasis in equities isn’t going to last.

Let’s go see where markets stand.