Today’s Quick Takes:
QT: There’s a subtle change going on with volatility. We’ve had higher lows and and yet again a spike to the trend line that was rejected. Volatility compression remains, but keeping track of the $VIX is key to inform risk/reward:
$VIX: Trend line rejection. Perfection.
KILLER chart and has been for 2 years.
Long time followers know what I’m talking about. I’ve discussed this chart at length all year.
I reiterate: This pattern will eventually break higher. pic.twitter.com/MHI20dIZxk
— Sven Henrich (@NorthmanTrader) November 15, 2017
QT: The relevance for markets: What’s the impact of support on tax reform? Mid-terms are in less than a year. This tax vote will be a political calculation of incumbents. Does support crack or not? Some Republicans have been frank about what’s driving this:
“My donors are basically saying, ‘Get it done or don’t ever call me again,’ ” Collins replied.
Big money wants tax cuts. That’s not the base doing the talking. It’s the donor base talking. And hence it’s not a surprise that the core values of these tax cuts are geared to serve their interests.
However, since margins are thin, the above approval chart will also factor in with some Republicans who will face re-election in less than 12 months.
When push comes to shove they are loyal to their positions more than they are to Trump’s agenda. Lose 2 or 3 key votes and it ends like healthcare. Markets are unlikely to kind in their reaction of tax reform fails. A lot is at stake.
QT: Knowing how many people rely on retail jobs to make ends meet the continuing and accelerating job transformation will have a ravaging impact during the next recession. Don’t kid yourself. AI technology is coming.
QT: The data trends keep sending the same message: The unwind will be brutal. But as long as low rates keep the peace nobody cares I suppose.
QT: When divergences don’t matter the fail safe explanation is: It’s different this time. Right.
QT: Terrifying kill stats coming from this outbreak. Humanity has been fortunate in the past 100 years. Massive advances in the medical field have helped keep ravaging diseases at bay. But antibiotics are beginning to meet their match in the ingenuity of nature to adapt to our efforts and resistant viruses and strains are proliferating. Our exponential growth as a species has made us ever more susceptible to something emerging we can’t stop in time. I hope the day never comes.
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