Bull trap mood, a calm day ahead for most markets.
The mood
The Risk Pulse is at +25.0: the market is leaning toward risk. The pattern right now is bull trap: narrow leadership (equal-weight lagging), VIX not falling, bonds bid despite rally. The three sources disagree today, so read the number with care. It describes the mood as it is now; it is not a forecast of direction.
What this pattern means: when the pattern is bull trap, stocks are rising, but only a few lead the way and bonds are being bought at the same time. The moves that set it right now: narrow leadership (equal-weight lagging), VIX not falling, bonds bid despite rally. It has been the pattern since Tue 08:53 (Milan time), about 2 minutes.
Over the last 24 hours the Risk Pulse started at −8.6 (Mon 08:54) and now stands at +25.0. Its lowest point was −9.8 at Mon 09:18, its highest +50.4 at Mon 17:07; the average of the whole day was +31.6.
One week ago, on Tuesday at 09:59, it was +8.0: 17.1 points lower than now.
The three data feeds, each on its own: feed T +39.4, feed Y +26.8, feed E +12.2. The distance between the highest and the lowest is 27.2 points: they disagree, so the number is less sturdy than usual. Right now only feeds E and Y count toward the number; the others are shown for comparison.
- ① Mon 16:17 The pattern turned bull trap; the Risk Pulse was at +42.9.
- ② Tue 02:48 The pattern turned bull trap; the Risk Pulse was at +47.2.
- ③ Tue 08:53 The pattern turned bull trap; the Risk Pulse was at +24.9.
Above 0 the mood leans toward risk, below 0 it leans cautious. It describes the mood as it was; it is not a forecast of direction.
The last 24 hours, moment by moment
Our instruments flagged 16 moments in the last 24 hours: 7 sudden jumps in a data feed, 6 market moves, 3 changes of pattern. In order (Milan time):
| Mon 14:49 | Sudden jump in a data feed | 4 sharp moves in 12 min · largest: sharp move in E · VIX Short-Term Fut -0.6% · Oil & Gas Explorat +0.5% · Nasdaq Volatility +0.4% |
| Mon 15:41 | Market move | Ibovespa Brazil -17.3% |
| Mon 16:15 | Change of pattern | Regime shift: BULL TRAP: narrow leadership (equal-weight lagging) · bonds bid despite rally |
| Mon 17:01 | Market move | Shenzhen Component +2.8% |
| Tue 01:16 | Change of pattern | Regime shift: STAGFLATION: equities falling · oil up |
| Tue 01:18 | Sudden jump in a data feed | 2 sharp moves in 2 min · largest: sharp move in E · Nikkei 225 +0.7% |
| Tue 02:33 | Market move | Nikkei 225 +2.4% |
| Tue 02:46 | Change of pattern | Regime shift: BULL TRAP: narrow leadership (equal-weight lagging) · bonds bid despite rally |
| Tue 03:05 | Market move | KOSDAQ +4.6% |
| Tue 03:07 | Market move | KOSPI +4.9% |
| Tue 08:35 | Sudden jump in a data feed | sharp move in E · KOSDAQ +2.3% · ASX 200 +0.5% |
| Tue 08:51 | Market move | Jakarta Composite -2.6% |
A change of pattern is when what moves together changes; a sudden jump is a reading far outside the usual for one feed. Neither says where prices go next.
The world, region by region
Asia, 2 markets, split: 1 up, 1 down, on average +0.39%. Nikkei +1.73% (a big move); Hang Seng −0.96% (a clear move). The gap between the strongest and the weakest: 2.69 points.
Europe, 3 markets, all up, on average +0.97%. FTSE MIB +1.29% (a clear move); DAX +0.91% (a clear move); FTSE 100 +0.72% (a small move). The gap between the strongest and the weakest: 0.57 points.
United States, 3 markets, all up, on average +0.60%. Nasdaq +0.82% (a clear move); S&P 500 +0.70% (a small move); Dow Jones +0.28% (a small move). The gap between the strongest and the weakest: 0.54 points.
Each figure is that market's move in its last full session. Flat is under 0.25%, a small move under 0.75%, a clear move under 1.5%, above that a big move. Across all 8: 7 up, 1 down.
The biggest move on the board: Nikkei +1.73%.
U.S. futures overnight
U.S. stock index futures trade almost around the clock, so they show how the night went. Status: Trading now · nearly 24 hours a day, Sunday to Friday. The largest move compared with a usual day: Nasdaq 100, −0.41%, 0.60× a usual day.
| FUTURES ON | SINCE LAST CLOSE | A USUAL DAY | VS USUAL | LEVEL |
|---|---|---|---|---|
| S&P 500 the 500 largest U.S. companies | −0.13% | 0.47% | 0.28× | 1 |
| Nasdaq 100 U.S. technology giants | −0.41% | 0.68% | 0.60× | 2 |
| Dow Jones 30 U.S. blue chips | +0.02% | 0.47% | 0.04× | 1 |
| Russell 2000 U.S. small companies | −0.16% | 0.52% | 0.32× | 1 |
The change is since the last daily close, last reading Tue 27 Oct, 08:40 (Milan). It is what already happened, not a forecast of the open. Prices may be delayed.
The currents: what is moving together
We follow 148 markets in 8 groups, measured since Tue 06:07 (Milan): 81 are up and 51 down. The group that moved most: Volatility, −2.83% on average. The quietest: World Indexes, +0.00%.
| GROUP | AVERAGE MOVE | UP / DOWN | LAST HOUR | SOURCES |
|---|---|---|---|---|
| Volatility | −2.83% | 2 / 3 | +2.50% | feeds differ |
| Crypto | −1.60% | 0 / 6 | +0.29% | one feed only |
| FX | +0.53% | 8 / 9 | +0.03% | feeds differ |
| Commodities | −0.45% | 5 / 11 | +0.00% | feeds agree |
| Equities | +0.45% | 25 / 8 | +0.04% | feeds differ |
| Credit | +0.17% | 8 / 1 | +0.00% | feeds agree |
| Rates | +0.01% | 4 / 2 | +0.00% | feeds agree |
| World Indexes | +0.00% | 29 / 11 | −0.10% | one feed only |
Average move of each group since the start of the measurement; "last hour" is how much that average changed in the last hour. What already happened, never what comes next.
Today's weather
Of 13 markets we follow, 2 are expected to move more than usual today and 7 less than usual. The busiest: TLT (long U.S. Treasury bonds), about 1.10× its usual move. The calmest: XLK (U.S. technology), 0.57×.
| MARKET | LEVEL | EXPECTED MOVE | VS USUAL | ||
|---|---|---|---|---|---|
| SPY | S&P 500 | 4 | normal | 0.53% | 1.07× |
| QQQ | Nasdaq 100 | 3 | quiet | 0.62% | 0.81× |
| IWM | U.S. small companies | 3 | quiet | 0.61% | 0.89× |
| DIA | Dow Jones | 3 | quiet | 0.42% | 0.80× |
| EFA | developed markets outside the U.S. | 4 | normal | 0.54% | 0.91× |
| EEM | emerging markets | 4 | normal | 0.76% | 0.99× |
| GLD | gold | 2 | calm | 0.65% | 0.68× |
| TLT | long U.S. Treasury bonds | 5 | lively | 0.43% | 1.10× |
| XLF | U.S. banks and financials | 4 | normal | 0.61% | 1.04× |
| XLE | U.S. energy | 3 | quiet | 0.71% | 0.77× |
| XLK | U.S. technology | 2 | calm | 0.60% | 0.57× |
| VNQ | U.S. real estate | 5 | lively | 0.58% | 1.10× |
| SMH | semiconductors | 3 | quiet | 1.08% | 0.71× |
Level 1 is very calm, 4 is a normal day, 8 is a storm. The expected move is up or down: we never say which way.
Over the next days, volatility is expected to stay about where it is.
The three busiest today, with the range we consider likely for the size of the move (up or down): TLT (long U.S. Treasury bonds): about 0.43% today, most likely between 0.11% and 1.27%. VNQ (U.S. real estate): about 0.58% today, most likely between 0.11% and 1.67%. SPY (S&P 500): about 0.53% today, most likely between 0.12% and 1.63%.
And the next five market days, market by market (level 1 very calm, 4 normal, 8 a storm):
| Wed 28 | Thu 29 | Fri 30 | Mon 02 | Tue 03 | |
|---|---|---|---|---|---|
| SPY | 4 | 4 | 4 | 4 | 4 |
| QQQ | 3 | 3 | 3 | 3 | 3 |
| IWM | 3 | 4 | 3 | 3 | 3 |
| DIA | 3 | 3 | 3 | 3 | 3 |
| EFA | 4 | 4 | 3 | 4 | 3 |
| EEM | 4 | 4 | 4 | 4 | 4 |
| GLD | 2 | 2 | 2 | 2 | 2 |
| TLT | 5 | 5 | 5 | 5 | 5 |
| XLF | 4 | 4 | 4 | 4 | 4 |
| XLE | 3 | 3 | 3 | 3 | 3 |
| XLK | 2 | 2 | 2 | 2 | 2 |
| VNQ | 5 | 5 | 5 | 5 | 5 |
| SMH | 3 | 3 | 3 | 3 | 3 |
The week ahead
Wednesday 28 October, 19:00 Milan time · The Fed decision. Since 2010, on 133 days like this the S&P 500 moved on average 1.28× its usual day. Last time (Wednesday, 16 September) the move was 1.60%, 1.50× what we had written in advance. The full story →
Thursday 29 October, 21:00 Milan time · Google earnings (after the close). Markets most exposed: QQQ, SPY. The full story →
Thursday 29 October, 21:00 Milan time · Microsoft earnings (after the close). Markets most exposed: XLK, QQQ, SPY. The full story →
Friday 30 October, 13:00 Milan time · Exxon earnings (before the open). Markets most exposed: XLE. The full story →
Friday 30 October, 21:00 Milan time · Amazon earnings (after the close). Markets most exposed: QQQ, SPY. The full story →
Tuesday 03 November, 21:00 Milan time · Apple earnings (after the close). Markets most exposed: XLK, QQQ, SPY. The full story →
These days tend to move markets more than usual. That says how much, never which way.
Our record
Forecasts written before the day and then checked: 520 right of 975 (53%). A coin would give about 50%. It is a strict test: a day counts as right only if we said in advance whether it would be busier or calmer than that market's usual day, and it really was. Every forecast is on the Track Record page, wrong days included, so you can judge it yourself.
The last checked days, one by one: Tuesday, 20 October 10 of 13; Wednesday, 21 October 7 of 13; Thursday, 22 October 5 of 13; Friday, 23 October 9 of 13; Monday, 26 October 8 of 13.
Stress Test: the water now
Of 16 broad markets, 12 are calmer than their own usual, 3 about as usual and 1 rougher. The roughest compared with its usual: BRL / USD at 1.53×; the calmest: CNY / USD at 0.25×. The furthest below its peak: BRL / USD, 71.4% below (on 12.3% of its past days it was even further below).
The price of fear
Options work like insurance against big moves: their price tells how big the market thinks the next month's moves will be. Over the last year, the options on Oil asked for the most extra: on average 0.62% a day more movement than really came.
| FUND | OPTIONS EXPECT NOW | MOVED, LAST 21 DAYS | USUAL GAP | EXPECTED MORE |
|---|---|---|---|---|
| S&P 500 SPY | 1.16% | 0.61% | +0.35% | 97% of days |
| Nasdaq 100 QQQ | 1.66% | 1.17% | +0.31% | 90% of days |
| Dow Jones DIA | 1.07% | 0.60% | +0.27% | 96% of days |
| Gold GLD | 1.48% | 1.37% | +0.07% | 55% of days |
| Oil USO | 3.70% | 2.11% | +0.62% | 81% of days |
All values are the size of a typical day, up or down. Measured Mon 26 Oct, 23:10 (Milan). It says how big moves were priced, never which way.
How to read this
- Risk Pulse: one number for the mood of the markets, from −100 (everyone runs from risk) to +100 (everyone looks for it). Around 0 is neutral. It describes the mood now; it never says where prices will go.
- The pattern: what is moving together right now: risk-on, calm, neutral / mixed, crypto stress, risk-off, flight to quality, liquidity squeeze, stagflation, bull trap, bear trap or exhaustion. The words after it are the moves that set it.
- The three sources: the Risk Pulse is built from three independent data feeds. When they agree, the number is sturdier.
- Level 1 to 8: how much a market is expected to move today, compared with its own history: 1 very calm, 4 a normal day, 8 a storm.
- Expected move: the typical size of today's move, up or down, in percent. 0.52% means a move of about half a percent either way.
- Vs usual: today's expected move divided by the market's usual one: 1.00× is usual, 1.12× is 12% more than usual, 0.66× is a third less.
- Our record: every forecast of the size of the move is written before the day and checked after the close: right means we called correctly whether the day would be busier or calmer than usual. A coin would score about 50%.
- The price of fear: options work like insurance against big moves. "Options expect" is the move their price asks for, as the size of a typical day; "usual gap" is how much more (or less) than what really came, over the last year. It never says which way.
- Stress Test: the water now: each broad market compared with its own long-run usual roughness: below 0.8× is calmer than usual, above 1.25× rougher. "Below its peak" is how far it stands under its highest point so far.
- The three data feeds: the Risk Pulse is computed separately on each of three independent data feeds, called Y, T and E. The number you read is the weighted one; the three are shown so you can see whether they agree.
- U.S. futures overnight: contracts on the U.S. stock indexes that trade almost around the clock. The change is since their last daily close; "vs usual" compares it with a usual day. It is what already happened.
- The currents: the markets we follow grouped by kind (stocks, rates, currencies, commodities, credit, crypto, volatility). For each group: the average move, how many of its markets are up or down, and whether the data feeds agree.
- The next five market days: the expected level of movement for each market on each of the next market days, from 1 (very calm) to 8 (a storm). Size only, never direction.
- The week ahead: scheduled events that usually move markets more than a normal day, with how much the market moved on such days in the past.
The level colours: 12345678 from very calm to extreme.
— Written by the Nostromo, our AI desk, from live data only; approved after automatic checks. Published 09:00 Milan time.