Thursday, 28 July 2016

No change, no surprise

US equities closed significantly mixed, sp -2pts @ 2166 (intra low 2159). The two leaders - Trans/R2K, settled -1.5% and +0.2% respectively. VIX settled -1.7% @ 12.83. Near term outlook offers the sp'2180/90s for the July close.


sp'daily5



VIX'daily3



Summary

So the Fed decided to leave int' rates unchanged in a range of 25/50bps. The next FOMC is not until Sept'21st, and even if the next two sets of monthly jobs data come in good, the Fed will remain reluctant to raise as the BoE, ECB, and even BoJ, might have cut rates.
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July is set for very significant gains

sp'monthly



The sp' is set for a fifth consecutive net monthly gain, and that is about as bullish as it gets. As of next Monday, we're set for a bullish MACD cross (aka.. MARCON 7), which will officially put the market back into 100% bullish mode.

Yes there are all manner of financial and geo-political 'issues' that could be used to excite the equity bears about possible future declines, but... ongoing price action offers absolutely nothing.

Goodnight from London

Wednesday, 27 July 2016

Awaiting excuses 447-449

US equities indexes closed moderately mixed, sp +0.7pts @ 2169. The two leaders - Trans/R2K, settled higher by 1.1% and 0.6% respectively. VIX settled +1.4% @ 13.05. Near term outlook threatens (at best) a test of the 2130s, but regardless... the sp'2200s remain due.


sp'daily5



VIX'daily3



Summary

A pretty subdued day in market land. It was notable that the two leaders were pushing higher, with the Transports provisionally confirming price structure of a bull flag.

VIX remains broadly subdued, with the key 20 threshold likely out of range until at least mid/late September.

Cyclically speaking, equity bears could argue for a break lower tomorrow afternoon, and into month end/early August. Yet, the past nine trading days have likely just been 'consolidation across time', before the next push higher in August.


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WTIC weekly



A fourth consecutive net daily decline, -0.5% @ $42.92. Bearish chatter continues to increase, with talk of the mid $30s. Yet... equity prices are far more suggestive that oil prices will 'somehow' settle the year closer to $60 than $40.. nevermind the $30s.
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447-449

The FOMC will issue a press release Wed' @ 2pm, there will not be a Yellen press conf'. There is higher probability of a 10km wide asteroid landing in the Pacific ocean tomorrow afternoon than the US fed raising rates.

What will excuses 447, 448, and 449 be, to justifiy not raising rates? I'm sure most of you can think of as many as I can.

As things are, the next realistic chance of the Fed raising rates - by a monstrous 25bps to a target range of 50/75bps, will be the Dec'14 meeting. and that is twenty weeks away. For others - notably UK savers, rates are set to be cut, with business people being issued with threats of possible charges being implemented by year end.

Clearly, the world economy just gets better with each day, and that is why we need rates to remain at emergency levels.

Is it time for the 100 meter hurdles in Rio yet?

Goodnight from London

Tuesday, 26 July 2016

Looking ahead to the July close

US equity indexes closed moderately weak, sp -6pts @ 2168. The two leaders - Trans/R2K, settled lower by -0.9% and -0.2% respectively. VIX settled +7.1% @ 12.87. Near term outlook still threatens an 'FOMC mini washout' to the breakout level of the sp'2130s, but broadly... the 2200s look inevitable.


sp'daily5



VIX'daily3



Summary

So, some weakness to begin the last week of July, but still, it was nothing of any significance.

It is notable that we've traded in a mere 20pt (0.9%) range across the past 8 days. Its arguably just 'consolidation in time', before the next push into the 2200s.

VIX remains broadly subdued
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Looking ahead to the July close

There are still four trading days left of July, but my attention is already switching to how the monthly candles will settle. As things are, a July close above the monthly 10MA (currently 2056) is now a certainty, and it is extremely probable that the sp'500 will settle net higher for a fifth consecutive month - the best run since June 2014.


My home market of the UK will be making a serious play for the 7000s this Aug/September...


A monthly close >7K would be hugely significant, and bode for similar strength in the US. The BoE will likely cut rates by 25bps in August, and possibly even spool up the printers. UK savers will once again be (justifiably) dismayed with the Canadian.... Mr Carney.

*I'll cover the world markets in depth this coming weekend.

Goodnight from London