Saturday, 27 August 2016

Some swings to end the week

US equity indexes closed moderately weak, sp -3pts, @ 2169 (intra range 2187/60). The two leaders - Trans/R2K, settled lower by -0.5% and -0.2% respectively. VIX settled +0.1% @ 13.65. Near term outlook is for renewed upside past the Labor day holiday (Sept'5th) into the sp'2200s.


sp'daily5



VIX'daily3



Summary

Yellen placated the market in early morning with the usual fedspeak, and after a little chop the market had climbed to sp'2187. Yet..  Fed official Fischer's appearance on clown finance TV gave the market the excuse for a significant swing lower. The sp' tested the lower daily bollinger @ 2160, with a closing hour moderate recovery.

Despite the 27pt downward swing, the VIX only managed a high of 14.93, and with the closing hour recovery, it cooled back to the mid 13s. Broadly the key 20 threshold still looks at least another month away.

Goodnight from London
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Fed/market chatter from Schiff



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*the weekend post will appear Sat' 12pm, and will detail the US weekly indexes

Friday, 26 August 2016

The 99% command economy

US equity indexes closed moderately mixed, sp -2pts, @ 2172 (intra low 2169). The two leaders - Trans/R2K, settled -0.6% and +0.2% respectively. VIX settled +1.3% @ 13.63. Near term outlook is for a post-Yellen break to the upside, as the sp'2200s remain due.


sp'daily5



VIX'daily3



Summary

There is little to be said about today. The sp' held above last week's low of 2168, with a fractionally higher low of 2169. With Yellen tomorrow, a weekly close in the 2190s is within range, not least as the cyclical setup favours the bulls.

VIX broke into the 14s again, but anything higher looks very difficult. The key 20 threshold still looks at least another month away.
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The Epipen nonsense

I'm pretty adverse to even mentioning it, but hell.... after watching yet another TV segment on it, I want to throw in my 2-pence (not cents).

We've never had an unrestrained market economy in modern times. Yet... things are unquestionably as worse as they've ever been, especially within the US medical sector.

The ongoing Mylan 'Epipen' saga continues to escalate. Whilst most are now focused on whether prices for the Epiniephrine injector device can be reduced back to the levels of 2-3 years ago, on the lunch time show, David Maris of Wells Fargo made the most important point of all...




Maris noted that after speaking to a company that manufactures medical products, the real cost of the Epipen is probably no more than $3.

Three dollars.    Just dwell on that for a bit.
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Yet.. the mainstream, and no doubt those in the US congress will keep the focus on whether the price should be pushed back from the low $600s to around $300.

Those hoping for anything significant to change about this should drop any such hope.

-There will no change in the behaviour of the FDA
-There will be no permitted competition, not least from the EU or Asia.
-There will continue to be lobbying and indirect bribes to members of the US government to keep all manner of products in a monopolistic state.





The CEO of Mylan (MLY) - Ms Heather Bresch, can spout 'its not my fault' all she wants on clown finance TV, and for the shareholders... she is truly outstanding. Its a real sight to behold, as a corporate leader swiftly deflects the blame onto others, and merely smiles,  knowing nothing of any significance will be changed.

Ironically, the only thing that the near 100% command economy we live in doesn't regulate, are salary caps. What does someone earning $18.9 million a year spend it on anyway? How about 31,500 Epipens?


MYL, monthly



Even with the bio-tech implosion last year, MYL is still double the level since the last big market floor in Oct' 2011. Trailing PE is 27, and the forward is just 7. Yet, the stock is morally untouchable, although I'd agree you could say the same about a great many others.

yours... no fan of needles... or morally contemptible bio-tech CEOs.

Goodnight from London

Thursday, 25 August 2016

Weakness ahead of Jackson Hole

US equity indexes closed moderately weak, sp -11pts @ 2175. The two leaders - Trans/R2K, settled lower by -0.1% and -0.9% respectively. VIX settled +8.6% @ 13.45 (intra high 14.01). Near term outlook offers Thursday chop.. ahead of Yellen on Friday. From there, the 2200s remain probable before end month.


sp'daily5



VIX'daily3



Summary

It was just another day of minor price chop... leaning on the moderately weak side.

VIX finally managed a close in the 13s, for the first time in 3 weeks. However, the key 20 threshold still looks out of range for at least another month.
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Talk of the 2300s continues



As I noted yesterday, mainstream talk is increasingly looking ahead to year end. Siegel is another who is seeking the sp'2300s by year end. Its obvious.. but still worthy of note... we're only talking about upside of 6-7%... which isn't exactly bold, considering we've four full months remaining of the year.

For me, unless we trade back under the breakout level of the 2130s in the somewhat tricky period of Sept/Oct, there is zero reason to expect any kind of autumnal/end year crash. I'll only put on my bearish hat if we're trading under the monthly 10MA, which in October will be around 2100.

Goodnight from London