Risk Happens Fast (Except in Late-Summer)

Judging by the price action in Treasuries, as TLT rises again and rates come down, the market is not exactly cocksure that an imminent Taper is necessarily in the cards. Instead, growth slowdown fears from the virus variants as well as China (as seen by the bewildering decline in LVS on the second daily, chart, below with its acute Macau/China gaming exposure) initially sent us lower this morning before dip-buyers did their usual thing to stabilize the tape as I write this. 

Still, the IWM is lingering below its 200-day moving average for the first time in eleven months. An ARKK remains below its own 200-day as Cathie took a big hit from the HOOD earnings selloff. Alternatively, NVDA is now moving higher nicely after its own earnings, and NFLX is is surging higher trying to reassume some leadership in the "FANG" stocks. 

Should small caps find at least a modicum of footing, I still maintain ISEE (first daily chart, below) is as attractive and clean as any biotech setup on the board right now. 

Overall, the late-summer pre-Jackson Hole pocket we are trading in may see some more ping-pong type of action for another week or so. Risk started to happen fast yesterday. 

But with the likely confusion the market has regarding The Fed's actual plans for autumn (and they, themselves, may not know them, either, at this point) we should not be surprised to see more day-to-day contradiction action. The old phrase on Wall Street is that the market hates uncertainty more than anything else. 

With a Fed Chair purposely being as vague as ever, and daily oscillations between deflation versus inflation (and sprinkling in stagflation) fears, I would argue uncertainty headed into autumn is as high as ever.