Thursday, 18 October 2018

Just another Thursday

US equity indexes closed very significantly lower, sp -40pts (1.6%) at 2768. Nasdaq comp' -2.1% at 7485. The two leaders - Trans/R2K, settled -2.6% and -1.9% respectively. VIX settled +15.3% at 20.06. Near term outlook offers chop into opex, but a marginally lower low (<2710) still appears probable early next week.


sp'daily5



VIX'daily3



Summary

Thursdays do tend to favour the equity bears (for various reasons), and today's weakness was not exactly a surprise. US equities opened moderately lower, saw an early low of 2788, with an initial rally to 2806. Then comments from Draghi and Mnuchin gave the market the excuse, sending prices spiraling lower into the afternoon.

Volatility was naturally higher, with the VIX settling above the key 20 threshold. S/t outlook offers a marginally lower low (<sp'2710), although considering tomorrow is opex - which leans to chop, that is far more viable next Mon/Tuesday.

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Bonus chart: China, monthly


With a Thursday decline of -2.9%, the Shanghai comp' is net lower for October by a rather severe -11.9%, having broken a new multi-year low of 2485. With soft psy'2500 lost, its mostly a case of 'empty air' to the giant 2K threshold. If that occurs.... implications for most China related stocks, not least BABA, JD, TCEHY, and BIDU.
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Wednesday, 17 October 2018

Midweek swings

US equity indexes closed a little mixed, sp -0.7pts at 2809. The two leaders - Trans/R2K, settled -0.6% and -0.4% respectively. VIX settled -1.2% at 17.40. Near term outlook offers sig' weakness to the sp'2750s, which would likely equate to VIX 22/23s.

sp'daily5



VIX'daily3



Summary

US equities opened a little weak, and quickly spiraled down to 2781, before a powerful rebound to 2816. The late afternoon saw a lot of chop, leaning on the weaker side, with the spx settling effectively flat.

Volatility was naturally mixed, opening in the 17s, but then swinging to a high of 19.55, before cooling back, settling fractionally lower in the 17s. The daily candle is a hollow red reversal, which leans s/t bullish.

Thursday will (in theory) lean to sig' equity downside to the sp'2750s, which would likely equate to VIX 22/23s.

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Tuesday, 16 October 2018

Bears getting cooked

US equity indexes closed powerfully higher, sp +59pts (2.1%) at 2809. Nasdaq comp' +2.9% to 7645. The two leaders - Trans/R2K, settled +1.8% and +2.8% respectively. VIX settled -17.3% at 17.62. Near term outlook offers a cooling wave, some sporadic 'spooky news' would help, especially on Thursday.

sp'daily5



VIX'daily3



Summary

US equities opened moderately higher, and relentlessly built gains all the way into the late afternoon. The sp' saw a closing hour high of 2813, which is 113pts (4.2%) above the Thursday low.

With equities powerfully higher, volatility was ground lower for a third day, with the VIX settling in the mid 17s. S/t outlook still offers an equity cooling wave, but its going to take some sporadic spooky news to get anywhere near last weeks low.
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Bonus chart: Germany, monthly


With 11 trading days left of the month, the DAX is currently -3.8% at 11776. This remains a concern.
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Extra charts in AH (usually around 7pm EDT) @ https://twitter.com/permabear_uk

Goodnight from London
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