Bull trap mood, a calm day ahead for most markets.
The mood
The Risk Pulse is at +37.6: the market is leaning toward risk. The pattern right now is bull trap: narrow leadership (equal-weight lagging), bonds bid despite rally. Our data sources broadly agree. 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), bonds bid despite rally. It has been the pattern since Tue 02:58 (Milan time), about 30 hours.
Over the last 24 hours the Risk Pulse started at +25.3 (Tue 08:57) and now stands at +37.6. Its lowest point was +8.1 at Tue 10:05, its highest +54.5 at Wed 08:31; the average of the whole day was +37.5.
One week ago, on Wednesday at 12:58, it was +26.5: 11.1 points lower than now.
Our data feeds, each on its own: feed T +39.4, feed E +30.0. The distance between the highest and the lowest is 9.4 points: they agree. Right now only feed E counts toward the number; the others are shown for comparison.
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 11 moments in the last 24 hours: 1 change of pattern, 7 market moves, 3 sudden jumps in a data feed. In order (Milan time):
| Tue 08:55 | Change of pattern | Regime shift: BULL TRAP: narrow leadership (equal-weight lagging) · VIX not falling · bonds bid despite rally |
| Tue 09:33 | Market move | Jakarta Composite down |
| Tue 12:03 | Sudden jump in a data feed | sharp move in E · VIX up |
| Tue 17:46 | Market move | Austria ATX up |
| Wed 01:19 | Sudden jump in a data feed | 2 sharp moves in 2 min · largest: sharp move in E · Nikkei 225 up |
| Wed 02:11 | Market move | Nikkei 225 up |
| Wed 02:17 | Market move | KOSDAQ up |
| Wed 02:29 | Market move | KOSPI up |
| Wed 02:33 | Market move | Shenzhen Component down |
| Wed 06:45 | Market move | Taiwan Weighted Index up |
| Wed 08:33 | Sudden jump in a data feed | sharp move in E · KOSDAQ up · Taiwan Weighted In up |
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: an ordinary session. Nikkei level 4 (normal); Hang Seng level 1 (very calm).
Europe: an ordinary session. FTSE MIB level 4 (normal); FTSE 100 level 4 (normal); DAX level 3 (below normal).
United States: an ordinary session. Nasdaq level 5 (elevated); S&P 500 level 3 (below normal); Dow Jones level 1 (very calm).
Each level says how big that market's last session was compared with a usual one: 1 very calm, 4 normal, 8 extreme. How much, never which way.
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 busiest compared with a usual day: Nasdaq 100, level 2 (calm).
| FUTURES ON | HOW BIG THE MOVE | LEVEL |
|---|---|---|
| S&P 500 the 500 largest U.S. companies | very calm | 1 |
| Nasdaq 100 U.S. technology giants | calm | 2 |
| Dow Jones 30 U.S. blue chips | calm | 2 |
| Russell 2000 U.S. small companies | very calm | 1 |
The level compares the move since the last daily close with a usual day, last reading Wed 28 Oct, 08:40 (Milan): 1 very calm, 4 normal, 8 extreme. It is what already happened, never which way and never a forecast of the open.
The currents: what is moving together
We follow 148 readings in 8 groups: 88 are up and 41 down. The most one-sided group: Volatility, 0% of its readings rising.
| GROUP | RISING | UP / DOWN | SOURCES |
|---|---|---|---|
| Volatility | 0% | 0 / 5 | feeds agree |
| Crypto | 100% | 6 / 0 | one feed only |
| World Indexes | 76% | 31 / 6 | feeds agree |
| Equities | 63% | 24 / 9 | feeds agree |
| Rates | 62% | 5 / 1 | feeds differ |
| Commodities | 42% | 8 / 9 | feeds differ |
| FX | 45% | 9 / 8 | feeds agree |
| Credit | 45% | 5 / 3 | feeds agree |
For each group: the share of its readings that are rising, and whether our independent data feeds measure it the same way. What already happened, never what comes next.
Today's weather
Of 13 markets we follow, 1 is expected to move more than usual today and 8 less than usual. The busiest: VNQ (U.S. real estate), about 1.15× its usual move. The calmest: XLK (U.S. technology), 0.58×.
| MARKET | LEVEL | EXPECTED MOVE | VS USUAL | ||
|---|---|---|---|---|---|
| SPY | S&P 500 | 3 | quiet | 0.41% | 0.85× |
| QQQ | Nasdaq 100 | 2 | calm | 0.49% | 0.67× |
| IWM | U.S. small companies | 3 | quiet | 0.58% | 0.84× |
| DIA | Dow Jones | 3 | quiet | 0.46% | 0.89× |
| EFA | developed markets outside the U.S. | 4 | normal | 0.53% | 0.90× |
| EEM | emerging markets | 4 | normal | 0.73% | 0.94× |
| GLD | gold | 2 | calm | 0.62% | 0.64× |
| TLT | long U.S. Treasury bonds | 4 | normal | 0.42% | 1.08× |
| XLF | U.S. banks and financials | 4 | normal | 0.59% | 1.02× |
| XLE | U.S. energy | 3 | quiet | 0.73% | 0.78× |
| XLK | U.S. technology | 2 | calm | 0.61% | 0.58× |
| VNQ | U.S. real estate | 5 | lively | 0.62% | 1.15× |
| SMH | semiconductors | 2 | calm | 0.97% | 0.64× |
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): VNQ (U.S. real estate): about 0.62% today, most likely between 0.12% and 1.76%. TLT (long U.S. Treasury bonds): about 0.42% today, most likely between 0.11% and 1.25%. XLF (U.S. banks and financials): about 0.59% today, most likely between 0.11% and 1.50%.
And the next five market days, market by market (level 1 very calm, 4 normal, 8 a storm):
| Thu 29 | Fri 30 | Mon 02 | Tue 03 | Wed 04 | |
|---|---|---|---|---|---|
| SPY | 3 | 3 | 3 | 4 | 4 |
| QQQ | 3 | 3 | 3 | 3 | 3 |
| IWM | 3 | 3 | 3 | 3 | 3 |
| DIA | 3 | 3 | 3 | 3 | 3 |
| EFA | 4 | 4 | 3 | 4 | 4 |
| EEM | 4 | 4 | 4 | 4 | 4 |
| GLD | 2 | 2 | 2 | 2 | 2 |
| TLT | 4 | 4 | 4 | 4 | 5 |
| XLF | 4 | 4 | 4 | 4 | 4 |
| XLE | 3 | 3 | 3 | 3 | 3 |
| XLK | 2 | 2 | 2 | 2 | 2 |
| VNQ | 5 | 4 | 5 | 5 | 5 |
| SMH | 2 | 2 | 2 | 2 | 2 |
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: 556 right of 1105 (50%). 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: Wednesday, 21 October 7 of 13; Thursday, 22 October 5 of 13; Friday, 23 October 9 of 13; Monday, 26 October 8 of 13; Tuesday, 27 October 3 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 1.77×; the calmest: CNY / USD at 0.21×. The furthest below its peak: BRL / USD, 71.3% below (on 13.2% 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 | 1.10% | 0.60% | +0.35% | 97% of days |
| Nasdaq 100 QQQ | 1.57% | 1.18% | +0.31% | 90% of days |
| Dow Jones DIA | 1.05% | 0.58% | +0.27% | 96% of days |
| Gold GLD | 1.42% | 1.09% | +0.08% | 55% of days |
| Oil USO | 3.49% | 2.12% | +0.62% | 81% of days |
All values are the size of a typical day, up or down. Measured Tue 27 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 data sources: the Risk Pulse is built from 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.
- Our data feeds: the Risk Pulse is computed separately on each of our independent data feeds, called by a letter. The number you read is the weighted one; each feed is 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 level 1 to 8 compares their move since the last daily close with a usual day. It is what already happened, never which way.
- The currents: the markets we follow grouped by kind (stocks, rates, currencies, commodities, credit, crypto, volatility). For each group: the share of its readings that are rising, how many 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.